FTSE/Xinhua Index, the China index provider, announced today that Barclays Global Investors (BGI) has filed a prospectus with the Securities and Exchange Commission to add the iShares FTSE/Xinhua Hong Kong China 25 Index Fund to its international exchange traded funds (ETF)offerings. This is the first ETF tracking the Chinese market to be made available to US investors.
The iShares FTSE/Xinhua Hong Kong China 25 ETF will track the FTSE/Xinhua China 25 Index, which includes the largest and most liquid Chinese equities available to foreign investors. The index constituents are classified according to the sector definitions of the FTSE Global Classification system. The constituents of the FTSE/Xinhua China 25 Index are adjusted for free-float and subject to liquidity screens for investability. The index is capped to ensure that no individual company is excessively weighted in the index and that funds tracking the index comply with European and North American market regulations.
“International investors are eager for a China index series that adopts transparent global standards like the FTSE/Xinhua China 25 Index,” says Mark Makepeace, FXI Director and Chief Executive, FTSE Group. “The FTSE/Xinhua China Indexes reflect China’s vibrant economy and aim to contribute to the internationalization of the Chinese investment market. It’s great to work with BGI to bring the first China ETF to the US market.”
Lee Kranefuss, BGI’s CEO of Individual Investor Business added: “There is strong demand to bring to market a cost-effective, tax efficient way for investors to gain access to the largest, most liquid Chinese securities. The FTSE/Xinhua Hong Kong China 25 is a great complement to the current international iShares line-up. We are delighted to work with FXI to provide innovative products to help investors diversify and globalize their portfolios.”
FTSE/Xinhua Index Limited is a joint venture between FTSE Group and Xinhua Financial Network (XFN), an independent financial information provider in China. Founded in 2000, the company is backed by a group of international investors. XFN is based in Hong Kong and Beijing.
“The combination of FTSE’s expertise in the design, calculation and management of indexes and XFN’s knowledge and experience in the Chinese investment market makes the FTSE/Xinhua China 25 Index an excellent benchmark for tracking the performance of the large cap equity market in China,” says FTSE.
With the addition of the FTSE/Xinhua Hong Kong China 25 to FTSE Group’s product portfolio, the number of ETFs listed on FTSE Indexes rises to 26, with $810 million in assets under management.
FTSE has previously licensed 12 indexes to BGI for use as the basis of iShares Funds, including the FTSE 100 and FTSE Eurotop 100 Indexes.
XFN’s strong presence in China allows the company to deliver an integrated platform of indices, objective and balanced real-time financial news feeds, and corporate data products. XFN delivers its product suite to global financial institutions and re-distributors via leased line, Internet and satellite technologies.
XFN is helping create a secure, transparent and robust infrastructure for China’s financial information markets. This infrastructure will help form the foundation to a financial information pipeline from China to the West. XFN’s comprehensive approach will help international investors streamline their investment decisions and analyse new opportunities in China.