Published On: Thu, Oct 23rd, 2014

First Batch Of Money ETF Listed And Traded In SZSE

Chen Dongzheng Chairman SZSE -

Chen Dongzheng Chairman SZSE –

On October 20, Shenzhen Stock Exchange (SZSE) issued the first batch of exchange traded money market funds (short for ‘money ETF’). Money ETF, upgrading and transforming on the basis of original exchange subscription and redemption money fund, is not only a significant innovation launched by SZSE this year, but also an important measure of carrying out the New National Nine and Opinion on Promoting the Innovative Development of Securities Invested Fund Sector.

After reform and transformation, the original exchange money funds: E Funds SWIFT Cash Money Market Fund and China Merchants Security Deposit Fast-swing Money Market Fund were traded actively on the first day of listing, with high turnover rates and stable trading prices. The turnover of SWIFT Money reached 476 million yuan, and its turnover rate reached 169%, while the turnover of China Merchants Fast-swing reached 195 million yuan, and its turnover rate reached 89%. The price fluctuation of two funds was narrow, with the deviation between the trading price of more than 99% transactions and 100 yuan net value less than 0.001%, reflecting the high-efficiency and low risk features of cash margin management instrument.

With the features of good liquidity, low risk, stable return and low trading cost, money ETF is an ideal margin management instrument for the exchange investors. Investors can get back the money via redemption as before, and via selling their holding money fund unit through secondary market, and the money received after the transaction may be used immediately in the purchasing stocks and other assets, enabling the investors to seize any fleeting investment opportunities; while enjoying stable investment return of money fund, investors may also avoid the liquidity risk of failing to redeem the fund in the event of triggering ceiling of redemption under the extreme market condition.

As the securities market gradually rebound, money ETF present a promising prospect. The number of newly-open securities accounts broke its record again and again this year, and the securities margin witnessed net inflow in 3 consecutive Quarters, rising from less than 600 billion yuan to 1.2 trillion yuan. It is forecasted that investors’ demand for cash management will increasingly escalate. With more and more stable investment return and improving liquidity, money ETF enjoys a vast development space.

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