The Chinese A-share companies involved in “next generation” industries are the focus of the ETF.
CSOP Asset Management, based in Hong Kong, has introduced an ETF in Singapore that offers exposure to forward-thinking Chinese A-share companies with significant growth potential. The Chinese A-share companies involved in “next generation” industries are the focus of the ETF.
On the Singapore Exchange, the CSOP CSI Star & ChiNext 50 Index ETF (SCY SP) has been listed in Singapore dollars. The CSI STAR & ChiNext 50 Index, which chooses its constituents from a pool of large-cap companies listed on the STAR and ChiNext markets, is linked to the fund.
The Shanghai and Shenzhen stock exchanges’ STAR and ChiNext markets, which are Nasdaq-style boards, are designed to attract innovative and rapidly expanding businesses, particularly high-tech companies, by offering less stringent listing standards than the exchanges’ Main and SME Boards.
The index searches the initial universe for companies involved in “next generation” industries, such as digital creative, high-end equipment manufacturing, new materials, biological innovation, sustainable energy automobiles, new energy production, and energy conservation.
The index chooses the top 50 eligible constituents and weights them according to market value.
By the end of November 2022, industrial companies made up nearly half (46.6%) of the index’s weight, and the index also had a sizable exposure to companies in the information technology (27.1%) and healthcare (23.3%) sectors.
CATL (10.0%), Mindray Medical (7.4%), Inovance Technology (6.4%), Sungrow (5.9%), and EVE Lithium Energy (5.3%) held notable positions. The ETF’s ongoing fees over a year are estimated to be 2.70% by CSOP, while its current management fee is 0.89%.
The fund is the second ETF to be listed in Singapore through the ETF link partnership between the Singapore Exchange and Shenzhen Stock Exchange. By listing so-called “feeder” ETFs, which connect locally listed ETFs to those listed on the other exchange, the ETF link, which was announced in 2021, aims to promote the ETF markets in Shenzhen and Singapore.
By making investments in the Shenzhen-listed China Southern CSI STAR and CHINEXT 50 ETF, the new ETF increases its exposure.
The first ETF to debut on Singapore Exchange through the ETF link was the UOBAM Ping An ChiNext ETF which came to market in Singapore in November 2022. The fund provides exposure to the largest Chinese A-share companies trading on ChiNext.