Chinese ETF market sees spike in liquidations

by , 5th December 2018

Several Chinese ETFs have been liquidated this week, having failed to gather enough assets to justify the cash burn in keeping them open. The delistings come as one of the biggest spikes in ETF terminations in China ever, Ultumus data indicates.

China AMC, one of China’s largest asset managers, has shut two of its China sector ETFs that looked at the Chinese materials and energy sectors. They were: the ChinaAMC SSE Materials ETF Index Sponsor Fund and the ChinaAMC SSE Energy ETF Index Sponsor Fund. The funds seem to have been hit hard by global dips in these sectors. Then hammered again by the trade war.

A Chinese real estate ETF from Huaan Fund Management got axed the very same day. The Huaan CSI Real Estate Segment Index ETF seems to have fallen victim to the widespread perception that Chinese real estate is in a bubble. Empty skyscrapers, white elephant malls, skyrocketing provincial debt – investors seem to have decided to avoid it. 

An interesting JP Morgan-backed smart beta ETF has also fallen victim to the termination wave. The CIFM SSE180 High Beta ETF, which picked Shanghai-listed companies with higher betas closed on Friday, in line with the other three ETFs above.

The product was issued by China International Fund Management, a joint venture between JP Morgan AM and the Shanghai International Group, a Chinese state-owned enterprise.

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