BEIJING, June 6 (Xinhua) -- Recently, public mutual fund companies in China sped up their "going global" paces through listing domestic exchange-traded funds (ETFs) on exchanges abroad in Malaysia, Brazil and Singapore to enable diversification of the toolkit to invest in China.
-- Mutual cooperation
On May 29, a tripartite memorandum of understanding (MoU) was inked between Fullgoal Fund Management Co., Ltd.'s subsidiary Fullgoal Asset Management (HK) Ltd., CGS International Securities Malaysia Sdn. Bhd. and Malaysian exchange Bursa Malaysia to promote international financial integration.
Under the MoU, the two Chinese-funded firms aim to jointly initiate listing China ETFs on Bursa Malaysia, which will provide Malaysian investors access to a broader range of investment options and promote capital market connectivity between China and Malaysia.
Signing such a tripartite MoU not only mirrors Chinese fund firms' endeavors to explore the financial markets of the Belt and Road Initiative partner countries, but also enhances the resource integration among a bourse, a public mutual fund firm and a securities broker, according to Fullgoal Fund.
Their future cooperation highlights stronger collaboration, concerted efforts on fostering inter-connectivity of capital markets of China and Malaysia, and enriching related cross-border products system.
Generally speaking, many Chinese and foreign financial institutions have been cooperating similarly to seek mutual gains and more and more industry-leading Chinese fund firms stepped out of the Chinese market to grow their international business.
Last year, public mutual fund firms in China including E Fund Management Co., Ltd., Southern Asset Management Co., Ltd., and China Universal Asset Management Co., Ltd. either entered MoUs to develop cross-border products with their foreign partners or made endeavors in this regard.
Guests attend a ceremony to introduce the Albilad CSOP MSCI Hong Kong China Equity ETF on the Saudi Stock Exchange in Riyadh, Saudi Arabia, on Oct. 30, 2024. (CSOP Asset Management Limited/Handout via Xinhua)
-- Connectivity via ETFs cross-listing
In recent years, cross-listing of China ETFs kept popping up, serving as a convenient channel to bridge the Chinese and foreign capital markets and enable additional China assets purchase by overseas investors.
On May 26, two such ETFs, namely the B-Index ETF Connect China Universal CSI 300 and B-Index ETF Connect ChinaAMC ChiNext got listed on B3, the main Brazilian stock exchange, tracking the CSI 300 Index and ChiNext Index through two underlying ETFs of China Universal Asset Management and China Asset Management Co., Ltd. (ChinaAMC) respectively.
Li Yimei, general manager of ChinaAMC, said the cross-listing of China ETFs marked a milestone moment for the China and Brazil capital market inter-connectivity and attested to the vast promise of bilateral financial cooperation through innovation and win-win approaches.
Such ETFs, a transparent, convenient and low-costing financial vehicle, help Brazilian investors access the opportunities brought by the core engines behind China's high-quality development, added Li.
Ricardo Eleuterio, director of Bradesco Asset Management, believed in the potential of China's market and the tremendous opportunities from diverse sectors, stressing that debut of the cross-listed ETFs offers diversified investment options for Brazilian investors.
The company and its Chinese partners are also eyeing enlargement in layout of differentiated products through their exclusive partnerships to further reinforce its global business, noted Eleuterio.
Earlier in March, another similar ETF named Lion-China Merchants CSI Dividend Index ETF was listed on Singapore Exchange, representing the first overseas-listed ETF that tracks the CSI Dividend Index in China.
Establishing also Renminbi (RMB) quotas, the Lion-China Merchants CSI Dividend Index ETF is the first cross-listed ETF that can be transacted in RMB, enriching, as experts say, offshore RMB-denominated investment instruments and outcomes in deepening China-Singapore financial cooperation.
-- "Going global" at a faster pace
In the future, the "going global" paces of public mutual fund firms in China are likely to rev up further amid favorable policies.
In March 2024, China Securities Regulatory Commission, the Chinese securities regulator, released an interim document on enhancing regulation over securities firms and public mutual fund firms and expediting construction of top-tier investment banks and institutions.
Within the document, facilitation to high-level opening up, adherence to "coming in" and "going global" at the same time, and stable progress in enlarging institutional opening-up are all mentioned, let alone orderly advancement of pilot cross-border inter-connectivity schemes such as the cross-listing of ETFs.
After listing the first ETF product under the China-Singapore ETF Connect scheme on Singapore Exchange in March 2024, China Universal Asset Management also promoted similar schemes with partners from Brazil and Arabian countries.
By joining hands with global partners, the company vowed to provide more quality financial products and services for investors to cement the financing bonding between China and global markets.
Currently, expanding global business presence and pooling overseas long-term capitals have appeared to be a general consensus among the public mutual fund companies in China.
In the coming years, foreign investors are expected to continue to raise their investment in China's capital market and under such circumstances, ChinaAMC plans to explore establishing ETF Connect schemes in Europe, Africa and other regions via more cross-listing of ETFs and market cooperation, according to the company.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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