China’s First Cross Border Exchange Traded Fund Begins Trading on the Shanghai Stock Exchange
The NASDAQ OMX Group, Inc., announced May 15 that China’s first cross-border exchange-traded fund (ETF), based on the NASDAQ-100 Index®, has begun trading on the Shanghai Stock Exchange. The Guotai NASDAQ-100 Exchange-Traded Fund (Symbol: 513100), sponsored by Guotai Asset Management, was created so that investors in China could easily invest in the largest and most liquid companies traded on The NASDAQ Stock Market. The listing of this product marks the first exchange-traded fund in China to provide access to the U.S. market.
Until now, investors in China have been able to access the U.S. market but only through ordinary Qualified Domestic Institutional Investor funds, most of which follow active strategies, are cumbersome to trade and involve a lengthy redemption process. The Guotai NASDAQ-100 Exchange-Traded Fund significantly enhances the efficiency of investment in U.S. securities for these investors. Additionally, because the product trades on the secondary market like any ETF, prices are transparent and transaction costs are low, making the product appealing to institutional and individual investors alike.
The launch of the Guotai NASDAQ-100 ETF is a significant development for the burgeoning exchange-traded product market in China. According to BlackRock, Inc., an independent, global investment manager, year-to-date inflows into Chinese equity ETPs increased 23.4 percent to $937.4 billion.
“We applaud Guotai Asset Management for responding to increasing demand among all classes of investors in China for a cross-border ETF,” said NASDAQ OMX Vice President Robert Hughes. “The Guotai NASDAQ-100 ETF enables individual and institutional investors in China to access 100 of the world’s largest and fastest growing companies — including Baidu, Microsoft, Apple and Starbucks.”
The NASDAQ-100 Index, which includes 100 of the largest international and domestic non-financial securities listed on NASDAQ, had a cumulative price return of 170.32% during the 10 years ended December 31, 2012.