Four Chinese Asset Managers Aim to Set Up Japan Stock ETFs
Liao Shumin
/SOURCE : yicai
Four Chinese Asset Managers Aim to Set Up Japan Stock ETFs

(Yicai Global) April 16 -- Four Chinese asset management companies plan to establish exchange-traded funds to track Japan's benchmark securities indexes.

The firms are China Asset Management, E Fund Management, Hua An Fund Management and China Southern Asset Management. The China Securities Regulatory Commission accepted their application documents on April 12, according to its website.

The Shanghai Stock Exchange and Japan Exchange Group signed a memorandum of understanding on closer cooperation on Oct. 26, with both sides agreeing to study the feasibility and make joint efforts to realize the China-Japan ETF Connect and deepen cooperation.

"Issuance of ETFs targeting the Japanese securities market, such as the Nikkei 225 ETF, will be of great significance to enrich China's financial instruments," an industry insider said.

The four proposed ETFs would track the Nikkei 225 Index and Tokyo Stock Price Index, or Topix, and relate to the China-Japan ETF Connect, which is likely to see new progress soon, the Securities Times reported, citing several industry insiders.

China Asset reported a China AMC Nomura Nikkei 225 ETF, Yicai Global learned, while E Fund, Hua An Fund and China Southern Asset reported an E Fund Nikko Asset Management Nikkei 225 ETF, Hua An Nikkei 225 ETF and China Southern Asset Management One Topix ETF, respectively.

The funds probably relate to the China-Japan ETF Connect, and Nomura and Nikko Asset Management in the ETF names refer to the Japanese financial partners, an ETF manager at a fund firm said.

The link will see renewed progress and its participants are leading asset managers from both countries, according to another industry insider. That is an important mark of the two-way financial opening-up between the two countries, he added.

China's Qualified Domestic Institutional Investor funds have covered the United States, Asia-Pacific and Europe since China Asset and E Fund released the first cross-border ETFs in August 2012. But just seven QDII funds operate as ETFs.

A limited number of China's QDII funds have Japanese assets, according to financial data provider Wind. Thirteen QDII funds held Japanese assets worth CNY76.7 million (USD11.4 million) until late last year, with their holdings each amounting to 9.93 percent of their net value on average.

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Keywords: ETF , Nikkei 225 Index , Cross-Border Investment