Hopes High for ETFs to be Attractive


CHINESE mainland investors may find the cross-border exchange-traded fund (ETF) a new and attractive investment option, according to market analysts.

A statement on the securities regulator's website on Monday said the China Securities Regulatory Commission is vetting applications from two Chinese fund companies to launch the mainland's first ETF linked to the Hong Kong stock market.

They are Guangzhou-based E Fund Management that will launch the ETF, which is linked to the Hang Seng China Enterprises Index that tracks the performance of Chinese companies listed in Hong Kong, on the Shanghai Stock Exchange and Beijing-based China Asset Management which plans to launch its ETF linked to the Hang Seng Index that will trade on the Shenzhen Stock Exchange.

Rainy Yuan, an analyst at MasterLink Securities (HK), said: "Exchange-traded funds can diversify investment risk for investors than buying just one share."

She said that mainland investors will find Hong Kong ETF appealing because the H share price of Chinese companies listed in Hong Kong is generally low for many industries.

Lu Huitian, an analyst at Shanghai-based fund tracker Howbuy, told Bloomberg News that ETF may give a boost to Hong Kong stocks.

He also said that if the Hong Kong ETF is introduced successfully, more overseas ETF products will be available to mainland investors.


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