CSOP Asset Management and Source, a London-based ETF provider, launched the first ETF in Europe to provide direct exposure to China's domestic stock market.
CSOP Source FTSE China A50 UCITS ETF garnered initial orders of 1.42 billion renmimbi ($230 million), just short of the 1.5 billion renmimbi quota CSOP Asset Management was awarded by Chinese regulators in November, under the renminbi qualified foreign institutional investor program launched at the end of 2011.
Jack Wang, CSOP's Hong Kong-based head of sales, said in a telephone interview that institutional investors accounted for almost all of the ETF's initial inflows — suggesting growing concerns among such investors about remaining dramatically underweight China as the pace of financial reforms there accelerates.
Mr. Wang said CSOP Asset Management will apply for additional quota capacity. Noting that China's regulators have moved aggressively to shorten the period required to process such requests. A process that could have required four or five months a year ago could take a month now, he said.
Source, launched in 2009, has more than 75 exchange-traded products, with combined assets of more than $15 billion, a joint news release said. CSOP Asset Management Ltd., founded a year earlier in Hong Kong, with $5.5 billion in assets under management, is the largest player in the RQFII market.