The Horizons CSI 300 ETF - the first exchange- traded fund (ETF) tracking the A-share index launched under the China's Renminbi Qualified Foreign Institutional Investors (RQFII) scheme by a foreign asset manager in Hong Kong -- was listed Friday on the Hong Kong stock exchange.

 

The Horizons CSI 300 ETF will offer the lowest fees among peer products in Hong Kong, the company said. As of  September 26 2014, the management fee and on-going charges of the Horizons CSI 300 ETF are capped at 0.25% per annum and 0.49% per annum respectively, the lowest among all Hong Kong-listed ETFs that also track the performance of CSI 300 Index.

 

Jung Ho RHEE, chief executive officer of Mirae Asset Global Investments (Hong Kong) (Mirae Asset HK), noted, "Before the launch of the RQFII scheme, most A-share ETFs in the market were synthetic ETFs because it was impossible to physically hold the underlying stocks. Now, with the opening up of China's A-share market, investors are able to get direct exposure to China market through RQFII A-share ETFs that are able to physically replicate the composition of the underlying stock index. RQFII A-share ETFs are in the spotlight as they allow investors to access to onshore China market directly as the country's growth story continues."

 

"The proven success of our Horizons ETFs Series, together with the significant enhancement to performance made possible by efficient low-cost fee structure, have provided us with great leverage to become Hong Kong's first foreign asset manager to launch a RQFII CSI 300 ETF. The Horizons CSI 300 ETF offers investors exposure to China's A-share market in the form of a cost-effective passive solution that closely mirrors the performance of the CSI 300 Index by investing directly in the index components listed on both Shanghai and Shenzhen stock exchanges," said Laura Lui, head of ETF at Mirae Asset HK.

 

Mirae Asset Global Investments (Hong Kong) Limited is the manager of the Horizons ETFs Series and is one of the first foreign institutions to obtain a RQFII licence and investment quota granted by the China Securities Regulatory Commission and the State Administration of Foreign Exchange of China respectively. The RQFII license allows Mirae Asset HK to carry out investments directly in China's Renminbi-denominated equity and fixed income markets.

 

"The opening up of China's A-share market is an exciting development for institutional and retail investors. The role of ETF managers in providing investors with transparent, liquidity and efficient access to China's A-share market will gain increasing prominence and we believe the Horizons CSI 300 ETF will continue to deliver cost-efficient returns to investors like all our other sub-funds" added Lui.

 

The CSI 300 Index is the first equity index launched jointly by the Shanghai and Shenzhen stock exchanges. Maintained by the China Securities Index Co., the CSI 300 Index is a capitalization-weighted stock index comprising 300 stocks listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange.

 

 

"China's representation in global emerging market indices has expanded significantly, but this has so far been based on Hong Kong-listed China shares or B-shares traded in China but in US dollar or Hong Kong dollar. With A-shares being investable, the next evolution could be for A-shares to be included in global benchmark indices. The prospect of this happening in the next few years could lead to immense opportunities for the A-share ETF market," observed Rhee.

 

The launch of the Horizons CSI 300 ETF brings the total number of sub-funds in the Horizons ETFs Series to 11. The Series also includes the Horizons MSCI China ETF which tracks the MSCI China Index and was listed on the Hong Kong Stock Exchange on  June 17 2013.