BlackRock lists its first China A share ETF

BlackRock lists its first China A share ETF

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BlackRock has listed its first China A share exchange-traded fund (ETF) on the London Stock Exchange.

The iShares MSCI China A UCITS ETF gives investors exposure to China A shares through BlackRock’s renminbi qualified foreign institutional investor (RQFII) quota.

“Investor interest in China is high and shows no sign of abating," said BlackRock’s Tom Fekete, head of product for iShares in Emea.

"This fund offers high-quality, low-cost exposure to one of the few global equity markets that are truly difficult for international investors to enter.”

The physical ETF is the only Ucits fund to track the MSCI China A International Index, which represents over 300 large and mid cap stocks.

BlackRock says its total expense ratio, at 0.65%, is lower than comparable physically replicating China A share ETFs open to international investors.

"We selected the MSCI index very carefully for its diversified basket of A shares, and built the ETF using the physical replication model that investors tell us they prefer," said Fekete.

"The world’s second largest economy is increasingly opening its stock market to greater foreign investment, and this ETF provides investors with a new option for accessing Chinese shares."

A shares are the largest single segment of the Chinese equity market and performed well in 2014, when the Shanghai Composite Index rose 58%. 

They are shares in mainland China incorporated companies listed on Chinese stock exchanges, including Shanghai and Shenzhen. 

A shares are easily available to mainland Chinese citizens. Foreign investment rules have become more relaxed in recent years through highly-regulated schemes such as the RQFII structure and Shanghai-Hong Kong Stock Connect.

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