China investors may have been disappointed with MSCI’s decision this week to delay the inclusion of A-Shares in its indexes. Chen Ding, CEO of Chinese Asset Management Association of Hong Kong, said they should not be too distraught because the sting won’t last long. ‘We are very, very close to getting China A shares into MSCI’s index framework,’ said Ding. ‘We observed that FTSE already did it last month and I think it won’t be way too long.’ Mainland Chinese A-shares, which are traded in Shanghai and Shenzhen, are denominated in renminbi and while B-shares are denominated in a foreign currency like U.S. dollars. Louis Lu, CSOP’s US-based portfolio manager, said after the decision that there is already a significant number of global investment funds that have begun to invest into A-shares via existing channels and he sees that trend continuing despite MSCI’s decision. CSOP was founded in 2008 as the first offshore asset manager set up by a regulated asset management company in China. CSOP is the largest RMB Qualified Foreign Institutional Investor (RQFII) asset manager globally with total assets under management of $6.2 billion as of March 2015. Over 80% of CSOP’s investments are in passive strategies with the rest being in actively managed strategies. In March the company launched the CSOP FTSE China A50 ETF, which is up 33% in the past three months. The ETF is comprised of A-Shares issued by the 50 largest companies in the China A-Shares market. ‘We think ETFs are a very transparent and efficient way to get into China,’ said Ding. Even after the recent run-up in Chinese shares, both Ding and Lu believe that large caps in China are still attractively valued.
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
