When the largest U.S. exchange traded fund tracking mainland China stocks, known as A-shares, had to virtually stop taking money at the end of November due to overwhelming demand, China A-Shares ETF providers said it was a demonstration of pent-up investor interest for a market that was until very recently out of their reach, as well as an example of how ETFs can innovatively address future investment opportunities.

But even as China gradually opens up its economy, supplying Chinese equity demand is not a simple process of deciding to launch an ETF product, providers say. There are a number of operational challenges that a firm must navigate to make the offering available, including finding the right local partner in China, calculating how much A-share quota they should attempt to access and managing a complex system of global exchange that involves precise timings and potential risks for clients.

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