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MSCI official A-share expansion plan MSCI China A-share international exchange index fund is the most benefit

May 15, 2019 03:35
source: China Securities Journal
edit:Eastern Fortune Network

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[MSCI official announcement of A share expansion arrangements MSCI China A shares international exchange index fund most benefited] On the morning of 14th Beijing time, MSCI announced the A share expansion arrangements, with the expansion of A shares will usher in incremental funds. At present, domestic fund companies have launched a total of 31 MSCI index funds. According to industry insiders, MSCI China A-Share International Link Index Fund has the most direct relationship with this expansion, and can best share the incremental funds brought about by the expansion. (China Securities Journal)

On the morning of the 14th Beijing time, MSCI announced the A-share expansion arrangement, and the expansion of A-shares will usher in incremental funds. Currently domesticfund companyA total of 31 MSCI indices were launchedfundAccording to industry insiders, MSCI China A-Share International Link Index Fund has the most direct relationship with this expansion, and can best share the incremental funds brought about by the expansion.

Expansion of the first step results released

On the 14th, MSCI announced the results of the MSCI stock index's semi-annual index evaluation in May 2019. The first step of China's A-shares in the MSCI Emerging Markets Index is the first step. The adjusted A-shares will increase the weight of the MSCI Emerging Markets Index. To 1.76%; in addition, A-share mid-cap stocks will be included in the November index adjustment.

At the same time, MSCIannouncementThe MSCI China A Onshore Indexes are adjusted and the index adjustments are made by the MSCI China All Shares Indexes. All changes will be implemented after the close on May 28, 2019.

MSCIAlumXie Zhengyu, managing director and head of the Asian research department, said in a media call held by MSCI in March to announce the promotion of the A-share factor. The A-share factor was increased from 5% to 20% in three steps. It is expected to bring in $80 billion in incremental funding for A shares.

Which indexes are “sucking gold”

The question investors are concerned with is that among the many domestic index funds that track MSCI, which ones can best share incremental funds from this process.

A person who understands the preparation of the MSCI index, to understand which index funds can best share incremental funds, must first clearly track the funds of the MSCI indices. In June 2017, MSCI announced that it will include A shares in the MSCI Emerging Markets Index. The MSCI Emerging Markets Index tracks trillions of dollars, ranking first among MSCI China's relevant public indices. On March 1, 2019, MSCI announced that it has decided to increase the inclusion factor of A-shares in its emerging market index, and the decision is implemented in three steps. As a result, incremental funds will flood into the A-shares included in the MSCI Emerging Markets Index, and the MSCI China A Inclusion Index is comprised of the above A-shares. In fact, this index is compiled by MSCI in order to reflect the process of A-shares into the emerging market index. It can be said that this index can best capture the incremental funds brought by the inclusion factor to A-shares.

In addition to the MSCI China A-Share International Link Index, the A-share portion of the MSCI China Index (MSCI China) coincides with the MSCI China A-Share International Link Index, and the A-share factor increase will also bring a large amount of incremental funds. However, the MSCI China Index constituent stocks also include Hong Kong stocks and overseas listed stocks. The data shows that there are no funds tracking the MSCI China Index in the current MSCI theme funds. It is understood that the 31 MSCI theme funds included in the index are mainly based on the MSCI China A-Share International and MSCI China A Index. The latter is also an MSCI index with A shares. Although its constituents intersect with the MSCI China A International Index, there is no relationship between them. Industry insiders judge that the increase in the inclusion factor of A-shares in the emerging market index will bring certain incremental funds, but its “sucking gold” is not as strong as the MSCI China A-Share International Link Index.

According to the above-mentioned person who understands the rules of the MSCI index, the above analysis only considers the A-share factor in the Emerging Markets Index to increase the incremental funds brought to the A-shares. In fact, MSCI raises the A-share inclusion factor behind the overseas funds to China. Increased market interest. In this sense, many Chinese market related index funds can benefit from it. E.g,ETFMonitoring website (ETF.com) information shows tracking in the USShanghai and Shenzhen 300The Xtrackers-Cash Real CSI 300 ETF has grown by more than 50% this year.

(Article source: China Securities Journal)

                                (Editor: DF380)


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