華夏基金 ChinaAMC
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ETF Series ETF Connect ChinaAMC's Strengths

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Connect to the largest

ChinaAMC has been China's largest equity ETF provider for 19 consecutive years.

26
years
Asset Management Experience
349.2
billion USD
Total AUM reach 349.2 billion
223.6
million
Serving 223.6 million retail investors
286,200
Serving 286,200 institutional clients

Data source: ChinaAMC, as of 30 Sept, 2024

ChinaAMC's strengths
in onshore ETF universe

26 Years History, Many Firsts

ChinaAMC was founded in 1998 and has since stayed at the forefront of the industry for 26 years with a succession of industry firsts: one of the first managers of closed-ended (1998) / open-ended (2001) funds, qualified managers of National Social Security Fund (2002), ETF (2004), Corporate Annuities (2006), Retirement Saving Public Fund (2018).

Largest equity ETF manager for 19 consecutive years

In 2004, ChinaAMC launched the first ETF product in mainland China. As of Spet 30, 2024, ChinaAMC has more than RMB 678 billion in AUM of ETF. It is the first mainland mutual fund manager with an ETF AUM of more than RMB 300 billion, and has held the position for 19 consecutive years (2005-2023).

Data source: ChinaAMC, as of 30 Sept, 2024

A diverse and comprehensive product line

ChinaAMC is committed to providing investors with a one-stop ETF product allocation solution, fully leveraging the instrumental value of ETFs in asset allocation. The company has 90 ETF products, with a diverse and comprehensive product line that fully covers mainstream markets such as A-shares, Hong Kong stocks, and overseas markets. Under the ChinaAMC flag there is a lineup of star ETFs in various sub-areas such as broad-based ETF, industry&theme ETF, strategies ETF, commodities ETF.

Awarded home and abroad

Over the past 19 years, ChinaAMC has kept innovating and accumulated rich experience in ETF management. ChinaAMC has been recognized among domestic and international institutional investors and awarded the "Golden Bull Fund Company for Passive Investment" by China Securities Journal for for eight consecutive years (2015-2022)1, and named the Best ETF Manager in China by Asia Asset Management for for six years running (2018-2023)2.

1Source: China Securities Journal, from 2015 to 2022.
2Source: Asia Asset Management, from 2018 to 2023.

Why offshore investors should care ChinaAMC's onshore strengths?

Because of
ETF Connect

When?

The inclusion of Exchange Traded Funds (ETFs) in Stock Connect was officially launched on 4 July 2022.

WHY?

The inclusion of ETFs in Stock Connect will bring in additional liquidity. It will draw new inflow to China ETFs and hopefully strengthen the attractiveness of China stock market to overseas long- and medium-term asset allocation portfolios.

It will increase the liquidity and trading volume of relevant ETFs. As a prime tool for liquidity management and sector & thematic investment, ETF will serve offshore investors seeking exposure to China capital market, which together will increase the liquidity and trading activity of relevant ETFs.

It will increase the clout of China ETFs in the international capital market. The increased participation by international investors and the promotional communications of domestic ETF providers will make these ETF products better known to overseas investors, and increase the influence of China ETFs in the global capital market.

It will promote the long-term healthy development of ETF market. With further capital inflows following the ETF Connect scheme, the percentage of institutional investors will further increase, which will benefit the long-term healthy development of the ETF market. Institutional investors usually focus more on ETF providers' investment capabilities and the competitive advantages of their ETF products, which is likely to prompt ETF providers to enhance the risk management of their index investing, improve ETF returns, and provide innovative products with distinctive risk-return profiles.

HOW?

Every six months reviews will be performed to determine eligible ETFs for Northbound trading. ETFs listed on SSE/SZSE that satisfy all of the following criteria at any regular review will be accepted as eligible ETFs for Northbound trading:

  • The ETF must be traded in RMB and have a daily average Assets Under Management (AUM) in the last six months of no less than RMB 0.5 billion;
  • The ETF must be listed for no less than six months;
  • The benchmark index must be launched for no less than one year;
  • The total weighting of SSE-listed and SZSE-listed A shares in benchmark index must not be less than 90% and the total weighting of Stock Connect Northbound eligible constituents in the benchmark index must not be less than 80%; and
  • The benchmark index or the index methodology of the benchmark index must fulfil either of the below criteria:
    • Applicable to broad-based indices:
      • A constituent stock must not be more than 30% of the index's weighting.
    • Applicable to non-broad-based indices:
      • The number of index constituent stocks must not be less than 30;
      • A constituent must not be more than 15% of the index's weighting and the total weighting of the top five weighted constituents must not be more than 60%; and
      • The constituent stocks comprising no less than 90% of the index's weighting must be the top 80% shares by Average Daily Turnover ranking in the relevant stock exchange in the past 12 months.

The stated criteria are subject to be changed by the relevant regulator.

FAQs

Since the first batch of 83 onshore ETFs eligible for northbound trading under the ETF Connect starts trading in 2022, the universe has expanded to 225 ETFs. Among them, a total of 22 products are from China Asset Management Co.(refered as ChinaAMC below)：the mainland's largest provider of equity ETF. Here are some FAQs.

 
1. Why offshore investors need to invest onshore ETFs even after they had gained access to A-share individual stocks?
  • To diversify risk via a basket of securities. Also, investing in ETFs help reduce liquidity risk stemmed from trading suspension of individual stocks.
  • Some foreign investors might have limited research capabilities when it comes to individual A-share stocks. It's difficult to keep up more than 5,000 stocks, and they might not have the ability to look into stocks beyond those big caps.
  • ETF products feature the most transparent risk-return profile, which is important for international investors who are less familiar with Chinese market.
  • Exempt from stamp duty (not for stock trading).
 
2. Why offshore investors need to invest onshore ETFs even after they can buy China-focused ETFs in major offshore bourses?
  • There are greater number of ETFs in onshore market, either broad-base index ETFs or thematic ones, offering much more choices.
  • Onshore ETFs generally are bigger in size, and more liquid than their overseas counterparts. This is usually the result of participation by more retail investors and the brokers hired by ETF issuers. Thus the liquidity, reflected in daily turnover, tend to be better and easier to invest, divest, arbitrage than similar overseas-listed ETFs. This will form a positive feedback loop that leads to a landscape where the strong ones tend to draw larger inflow.
  • There are products that are not available overseas, such as food & beverage ETF, NEV ETF.
 
3. Why choose ChinaAMC's ETFs?
  • As mentioned earlier, size and liquidity matters. Since the launch of China's first ETF product— ChinaAMC SSE 50 ETF (ticker: 510050) in 2004, ChinaAMC has been the No.1 player in China's equity ETF market for 19 consecutive years in terms of AUM. As of Sept 2023, total AUM of ChinaAMC's equity ETFs exceeds RMB 678 billion.
  • Beyond broad-base index ETFs, ChinaAMC's ETF universe also covers a diversity of sectors & themes, such as carbon neutrality, semiconductor, NEV, 5G, F&B and Game&Animei.
  • With 19 years of experience, ChinaAMC has accumulated seasoned investment experiences and is well recognized by domestic and global institutional investors. For the past 8 straight years, ChinaAMC has been awarded the "Golden Bull Fund Company for Passive Investment" consecutively (2015-2022, China Securities Journal)1. It has been chosen as the ETF Manager of the Year (by China) for 6 straight years (2018-2023, Asia Asset Management)2.
1 Source: China Securities Journal, from 2015 to 2022.
2 Source: Asia Asset Management, from 2018 to 2023.

Data sources: SSE, SZSE, Wind, ChinaAMC, as of Sept 30, 2024. Copyright © ChinaAMC. All right reserved.
Investment involves risk, including possible loss of principal. Past performance does not represent future performance. Future return is not guaranteed. The information contained herein is for informational purposes only and does not constitute an offer or invitation to anyone to invest in any funds and has not been prepared in connection with any such offer. The material has been prepared and issued by China Asset Management (Hong Kong) Limited. This material has not been reviewed by the Securities and Futures Commission.