China to get its first Euro Stoxx 50 ETF

Stoxx has licensed the Euro stoxx 50 to China Universal for an ETF, marking the first of its kind in the country

made-in-eu-stamp
European equity exposure to China

China is set to have its first exchange-traded fund (ETF) linked to the Euro Stoxx 50 index, after the European benchmark was licensed to asset management company China Universal for an ETF on February 26. The ETF will also be the first based on the Euro Stoxx 50 throughout Asia, according to Konrad Sippel, Frankfurt-based global head of product development at Stoxx.

"It is a challenging process to receive regulatory approval for a product in China, so this has been something we have worked on for a while," says Sippel. "We always felt that there is demand in Asia for investing in Europe and outside of local markets."

Assets invested into ETFs based on the Euro Stoxx 50 have increased by around 3% since the end of 2012, according to Sippel. While in January 2012 there were minimal outflows from European equity ETFs, January 2013 saw $2 billion of inflows, according to data from Blackrock.

The appetite for ETF investing in Asia remains strong. Assets invested in ETFs and exchange-traded products (ETPs) listed in Asia-Pacific (ex-Japan) rose 6.6% in January to reach an all-time high of $94.1 billion, according to data from ETFGI, an ETF research and consulting company based in London.

Two days after the licensing of the Euro Stoxx 50 in China, Stoxx launched the Stoxx China A 50 Index, a blue-chip index comprising the 50 largest Chinese A-Shares. The new index is derived from the Stoxx China A Total Market Index, which covers about 95% of the free-float market capitalisation of the investable stock universe of Chinese A-Shares.

In Europe, Stoxx has $97 billion of ETF and ETP assets tracking its benchmarks – a 25% share of the regional market, according to ETFGI.

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