Lyxor launches China A Shares ETF

Lyxor has launched an ETF offering exposure to China A Shares, while revealing steps to “complete” its range with frontier market trackers to be introduced next year.

Lyxor launches China A Shares ETF


Lyxor Ucits ETF CSI 300 A Shares replicates the performance of the main Chinese onshore index, an alternative to the more freely accessible offshore H Shares market. It has a TER of 0.40% and is aimed predominantly at institutional investors.

Lyxor has been managing products accessing H Shares since 2006 with its China Enterprise fund the largest ETF in Europe covering this sector.

Arnaud Llinas, head of Lyxor ETFs & indexing, said frontier markets was the next challenge for the firm. It has been carrying out stress tests on individual indices, and while few frontier markets make it through liquidity screens, “one or two” single-country ETFs are due in Q1 2014.

Lyxor, part of Société Générale, is also interested in introducing further products in the smart beta arena, though despite there being room for genuine innovation Llinas says the number of ETFs has probably “reached a peak in Europe”.

“We have now reached around 1,200 ETF products in Europe, and this may even begin to decrease this year,” he said.

“Below €20m in size for an ETF is not profitable, and there are around 25 different Euro Stoxx 50 products available in the market today – do we really need all of them?”

“The ETF market in Europe is 90% institutional and only 10% retail. The challenge is to ensure the infrastructure and ecosystem is there to distribute them, but I think RDR is helping in the UK.”

The Federal Reserve’s surprise decision to continue with the $85bn monthly bond buying program saw global assets under management in exchange traded funds rise $105bn to $2.1 trillion in September