New York-based Global X Funds has announced that its suite of US-listed China equity sector ETFs will adopt new indices.
Global X Funds’ suite of China equity sector ETFs will adopt new indices designed to include China A shares.
The funds, which currently track Solactive and Nasdaq indices, will transition to indices provided by MSCI on or around 5 December 2018.
As a result of the transition, the ETFs will start to include China A-Shares, shares of mainland China domiciled and listed companies denominated in Renminbi.
The move follows MSCI’s announcement in June last year that it would progressively start to include A shares in its mainstream global indices, notably the MSCI Emerging Markets Index and MSCI ACWI.
Several other ETF issuers have since either launched dedicated China A-share products or restructured their existing offering to include A-share exposure where relevant.
MSCI said its decision stemmed from improvements in China A-share accessibility underpinned by the Stock Connect programme and the loosening of pre-approval requirements that had restricted the creation of index-linked investment vehicles, such as ETFs, globally.
The suite includes six funds providing exposure to firms operating in the consumer (discretionary and staples), energy, financials, industrials, materials, and technology sectors of the Chinese economy.
The ETFs collectively house approximately $200 million in assets under management, of which around $130m is in the Global X China Consumer ETF. Each fund comes with an expense ratio of 0.65%.
Global X said, “The index changes reflect Global X’s continued collaboration with MSCI, which will additionally extend to the firm’s prospective additions to its suite of China sector ETFs, slated to come to market at a future date. Together, these index changes along with the upcoming fund launches will establish a suite of ETFs that track each major economic sector in China.”
Additionally, Global X has announced that its Global X Next Emerging & Frontier ETF (EMFM US) will migrate from the Solactive Next Emerging & Frontier Index to the MSCI Select Emerging & Frontier Markets Access Index, effective 16 January 2019.
The changes are outlined below:
Source: Global X.