UOB Asset Management has announced a significant change to its Singapore-listed ETF, effective 25 March 2025. The ETF, formerly known as the United SSE 50 Index ETF, now tracks the FTSE China A50 Index, aiming to improve investability and operational efficiency for offshore portfolio managers. This shift is expected to make the ETF more appealing to international investors.
The FTSE China A50 Index comprises 50 Chinese A-Share companies listed on the Shanghai and Shenzhen Stock Exchanges, including new technology stocks such as CATL and BYD. These companies are part of the index’s largest weights, with CATL holding a 6.8% weight and BYD a 4.0% weight. The inclusion of these stocks is part of a broader strategy to provide better representation and tradability of the China A-share market.
The revamped ETF now offers both SGD and USD counters, with a minimum tick size of 0.001. The change aligns with China’s recent economic policies, which include boosting foreign reinvestment and supporting industrial chain collaboration. These policies were announced in March, alongside a fiscal deficit increase to $219 billion (RMB 1.6 trillion) and a GDP growth target of 5%.
The FTSE China A50 Index has shown strong performance, generating a 21.8% total return in 2024. It ranks among the top three performers of China-focused indices maintained by FTSE Russell, with the second-lowest volatility. This change in the ETF’s underlying index is expected to enhance its attractiveness to investors seeking exposure to China’s dynamic market.
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