Chinas first cross-border exchange-traded fund, based on the NASDAQ-100 Index, has begun trading on the Shanghai Stock Exchange. The NASDAQ-100 Exchange-Traded Fund, sponsored by Guotai Asset Management, was created so that investors in China could easily invest in the largest and most liquid companies traded on NASDAQ. The listing of this product marks the first exchange-traded fund in China to provide access to the U.S. market.
Until now, investors in China have been able to access the U.S. market but only through ordinary Qualified Domestic Institutional Investor funds, most of which follow active strategies, are cumbersome to trade and involve a lengthy redemption process.
The launch of the Guotai NASDAQ-100 ETF is a significant development for the burgeoning exchange-traded product market in China. According to BlackRock, year-to-date inflows into Chinese equity ETPs increased 23.4 percent to $937.4 billion.