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Chinese physical ETFs boosted by RQFIIs
19 February 2013
Physically-backed ETFs are gaining momentum relative to their synthetic equivalents, finds Anna Reitman, not least because of the emergence of RQFII products that provide a route into Chinese A-shares
There was cause for celebration for emerging Asia ETF providers as the final economic numbers rolled in for 2012. All signs pointed to a strong rebound as well as positive sentiment going into this year for key economic sectors. In turn, the ETF market has been a big beneficiary of investor interest with record inflows and volumes despite some remaining question marks over the loss of momentum in synthetic products.
According to Morningstar, launches of synthetic products throughout 2012 had become quiet, with just over a dozen new ETFs hitting the market; six from Deutsche Bank’s db X-trackers, seven from Enhanced Investment Products (EIP) in Hong Kong and two from Lyxor in Singapore.
Jackie Choy, Morningstar’s ETF strategist for Asia says that in Hong Kong, synthetics are less popular as a result of the emergence of physically-backed RQFII (Renminbi Qualified Foreign Institutional Investor) products. Launched in late 2011, RQFII...
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