SINGAPORE: The Singapore Dollar traded United SSE50 Exchange Traded Fund (ETF) will be reclassified as Excluded Investment Product (EIP) starting 1st April 2019, making it more accessible to retail investors.[the_ad id=”31605″]The investment objective of United SSE50 ETF is to provide investment results that, before fees, costs and expenses, closely correspond to the performance of the SSE 50 Index. SSE 50 Index tracks the top 50 stocks listed on the Shanghai Stock Exchange, Singapore Exchange (SGX) said.
ETFs are investment funds listed and traded intraday on a stock exchange.
There are five China-focused Exchange Traded Funds (ETFs) listed on SGX that seek to replicate major market indices return in China. As of 26th March, these ETFs have enjoyed year-to-date average return of 20%, ranging from 13% to 31%.
Expense ratio of these ETFs ranges between 0.45% to 0.65%, offering investors a low cost alternative to partake in the growing China market.
According to SGX publication, strong interest in Asia Pacific region is expected to dominate in 2019, mainly driven by positive impact from MSCI’s decision to quadruple the weighting of Chinese mainland shares in its global benchmarks and Bloomberg inclusion of China RMB-denominated securities into the Bloomberg Barclays Global Aggregate Index.
Analysts believe a larger MSCI weighting might draw US$80 Billion of fresh foreign inflows to Chinese A-shares this year.
On its completion by November this year, the Chinese weighting in the MSCI Emerging Market Index will be tripled from 0.71 percent to 2.82 percent by August this year. A-shares are securities of Chinese incorporated companies that trade on either the Shanghai or Shenzhen stock exchanges.
Alongside the move by MSCI, Bloomberg will add Chinese RMB-denominated government and policy bank bonds to its Bloomberg Barclays Global Aggregate Index starting April 2019 and phased in over a 20-month period. When fully accounted for in the Global Aggregate Index, local currency Chinese bonds will be the fourth largest currency component following the US dollar, euro and Japanese yen.