China’s ETF assets surge to $61.5 billion

China’s ETF assets surgeChina’s exchange-traded fund (ETF) assets saw an 84.1% spike to reach $61.5 billion over 18 months (January 2018 to March 2019), according to Cerulli Associates. The figure does not take money market ETFs into account. Meanwhile, index funds grew at a similar pace of 83.4% to RMB220 billion. Accounting for approximately 65% of passive assets, ETFs experienced record inflows of RMB189.6 billion in 2018. “At the end of March 2019, equity ETFs took 94.6% of total ETF assets, or 61.7% of total passive assets,” the Boston-based consultancy commented in a press release. Cerulli noted that now is perhaps the best time to promote passive products in China as awareness is at a high amongst investors due to a combination of market movements and educational efforts. “There is ample room for fund managers to explore areas such as further industry segmentation; new technology or economy themes; environmental, social, and governance; multi-factor smart beta; and overseas exposure. There is also potential to expand bond and commodity ETF offerings, which are still limited and lack diversity,” said Miao Hui, senior analyst with Cerulli Associate. “Innovation will be essential for small and mid-sized managers and new entrants to win meaningful market shares,” added Hui. ©2019 funds global asia

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