Structured products: News

International investors are now in a position to get cheap and liquid access to China's A-share market.

The FTSE/Xinhua A50 index has been chosen by Barclays Global Investors as the benchmark for its brand new exchange-traded fund (ETF), which will give investors exposure to the performance of China's A-shares. The ETF is to be listed on the Hong Kong Stock Exchange.

This will be the first such investment product to offer international investors access to the A-share market in China, usually restricted to local investment only.

The FTSE/Xinhua A50 China Tracker will track the performance of the FTSE/Xinhua China A50 Index, capturing the performance of the top 50 A-shares that trade on the Shanghai and Shenzhen stock exchanges in China. Xinhua FTSE indices have become firmly established as the preferred benchmarks for China's domestic market, and have been used in 2004 for a series of BGI ETF launches with a China equity theme.

"The launch of the A50 China Tracker is of great significance to both Chinese and international investment communities," said Fredy Bush, CEO of Xinhua Finance. "This, for the first time, provides a path for China 'A' share enterprises to attract foreign funds as well as a unique opportunity for international investors to invest in domestic stocks."

As an ETF, the A50 China Tracker now being marketed by BGI represents an easy and affordable way to get exposure to the Chinese A-share marketplace, a marketplace which it has been historically difficult for non-Chinese investors to buy.

The Xinhua FTSE Index, or XFI, was set up in 2000 as a joint venture between Xinhua Finance and FTSE. It was created to meet a demand for a series of real-time stockmarket indices in China. The indices provide coverage of stocks listed on both the Shanghai and Shenzhen exchanges, and are designed according to internationally recognised stockmarket index design methodology that ensures the indices are transparency, clear, and consistent.