In recent years, the scale of the A-share ETF industry has exploded, and the scale of equity ETFs exceeded the trillion yuan mark for the first time in September this year, which not only prompted the public offering fund to increase its layout, but also attracted the attention of global asset management giants. At present, BlackRock, Vanguard, Invesco, UBS, Fanda and other well-known global ETF managers have entered the Chinese market.
Industry insiders believe that although it has not yet begun to aggressively lay out A-share ETFs, the gathering of global index fund giants in the Chinese market indicates that local public funds will usher in strong competitors in the ETF market. These foreign institutions are prepared to combine their rich experience in overseas markets with the actual situation in the Chinese market and enter the competition when the time is ripe.
In the view of many foreign institutions, although it has experienced rapid development for many years, the A-share ETF market still has huge potential and is worth further exploration. According to statistics, at present, among the top 15 ETF managers in the world, BlackRock, Pioneer, Invesco, UBS, Fanda and other well-known foreign institutions have set foot in the Chinese market.
Sima Fei, Asia Pacific head of jpmorgan's ETF business and director of direct selling and digital for Asia Pacific, predicts that A-share ETFs could be worth as much as $500bn by 2025.
Sima Fei said that China's stock and bond markets have become the largest in the world, and global investors are constantly pouring into the Chinese market. In addition, the inclusion of the A-share market in global indices by MSCI and Bloomberg Barclays will also attract more capital inflows.
Zhang Chi, general manager of BlackRock Fund, believes that as an important asset management tool, ETFs can reduce investors' excessive reliance on individual stocks and even individual industries, so as to fully share the dividends of economic development. "The global ETF market will reach $15 trillion by 2025, and it's a huge market worth exploring."
On July 4 this year, the Mainland and Hong Kong market ETF Connect was officially launched. In the view of many foreign institutions, the inclusion of ETFs in the interconnection mechanism will promote the integration of A-share ETFs into the international market, and also help global investors further participate in the A-share ETF market.
"With the deepening of opening-up, we believe that more types and industry-themed ETFs will go to the global market through the ETF Connect mechanism, which will not only help overseas investors invest more directly in the Chinese market, but also provide opportunities for overseas investors to share the dividends of China's economic development." Shanghai investment Morgan fund general manager Wang Dazhi said.
"In the past, global investors used to gain exposure to China through China-themed ETFs listed in the US and Europe. If you want to layout China's ETF, you must obtain the QFII quota in advance, and the process is relatively complicated. The implementation of the ETF Connect mechanism marks the further opening of the A-share ETF market to international investors." Sima Fei weigh.
Local public funds have welcomed strong overseas competitors, but it is not easy for foreign institutions to enter the A-share ETF market, and they need to make full market research and investment preparation in advance.
A foreign investor who is applying for a public offering license in Shanghai said that the current A-share ETF market competition is very fierce, product homogenization is more serious, and some smaller products are facing liquidation risks, mainly because some companies are too chasing market hot spots when carrying out product layout and lack long-term planning.
"In fact, this phenomenon is also common in overseas markets, and many thematic ETFs will choose to liquidate if the scale effect does not meet expectations." In the future, when we carry out product layout, we will not rush to follow market hot spots, but will fully study the trend of global economic development and people's living habits, develop theme indexes, and carry out relevant product layout based on these indexes." "The person said.
The head of A well-known global ETF manager in China said that the company hopes to bring the experience accumulated in the past investment in the global ETF market to the Chinese market, and will also learn the experience of local public funds, and gradually form its own A-share ETF product line when the time is ripe.
Source: Shanghai Securities News
