China Exchanges Services Company (CESC) has unveiled the CES China Private Elite Index (CES P Elite), designed to capture the performance of Mainland China’s 30 largest private enterprises listed on the Hong Kong Stock Exchange or on the NYSE, NASDAQ or AMEX stock exchanges. The index has been designed to underlie future investment products including ETFs.

The CES China Private Elite Index captures the performance of Mainland China’s 30 largest private enterprises listed on the Hong Kong Stock Exchange or on the NYSE, NASDAQ or AMEX stock exchanges.

The universe of the CES P Elite tends towards broad market coverage and industry diversification, factors that are valued by global investors. Constituent stocks are derived from dynamic sectors including information technology, consumer discretionary, financial and consumer staples – believed to have strong growth potential within China’s economy, according to CESC.

CESC Chief Executive Mao Zhirong, commented: “The segment comprised of the Mainland private enterprises is growing stronger and more influential in China’s economy. Private enterprises are now becoming an important driving force in the stock market and the CES P Elite is an index tailored to capture the economic growth in the Mainland.”

The index’s constituents generally have a relatively autonomous ownership structure whilst enjoying strong support from the government.

Constituents are weighted by free float-adjusted market capitalisation with a 15% cap per stock.

The index is calculated in both US and Hong Kong dollars.

As of 30 December 2016, the index’s largest constituents are Tencent Holdings (15.8%), Baidu (15.1%), Alibaba (14.7%), Ping An Insurance (8.8%), JD (8.3%) Ctrip (5.8%) and NetEase (5.7%).

In terms of historical return, the index’s 1 year, 3 year and 5 year returns were 22.1%, 20.3% and 69.1% respectively.

CESC has licensed the CES P Elite to a product issuer to serve as the underlying index for the creation of an index-linked product.

“With the strong growth potential of the segment, we have licensed a product issuer to offer products linked to the index,” Mao added. “CESC strives to provide index solutions for cross-border China investment, and we always pay attention to the latest market movements and client’s needs. Looking into the future, we will continue to work closely with our partners to develop more innovative indices and products.”