New ways to capture the growth of China's consumer market
HONG KONG, July 19 /PRNewswire-Asia/ -- BlackRock today announced that its iShares Exchange Traded Funds (ETFs) business, the world's leading ETF provider, launched two new China A-Share Consumer ETFs.
The new iShares ETFs include:
-- iShares CSI A-Share Consumer Discretionary Index ETF ([iSHARES A
DISC], stock code: 3001)
-- iShares CSI A-Share Consumer Staples Index ETF ([iSHARES A STAP],
stock code: 2841)
Trading will commence on 20 July 2010 on the Stock Exchange of Hong Kong. The funds will launch with more than USD105 million in day-one assets under management.
The two new iShares China A-Share Consumer Sector ETFs aim to provide transparent and liquid market access to the growing Chinese consumer market. Forecasts predict that China's share of global consumption will reach 21% by 2020, overtaking the US to become the world's largest consumer market(1).
Nick Good, Managing Director and Head of iShares, Asia-Pacific at BlackRock, described the advantages of investing in China through ETFs: "In the last few years, iShares has observed tremendous interest from both institutional and retail investors in the China market. Our analysis shows that only 16% of the companies in the A-Share market have issued H-Shares. The consumer staples and consumer discretionary sectors are particularly underrepresented meaning that investors may not be able to access the consumer sectors easily through the H-Share market alone(2). Our new ETFs offer investors the opportunity to invest in a previously hard to access segment of the China market."
In November last year, iShares launched the world's first China A-Share Sector Series, allowing investors to gain cost-efficient access to the performance of energy, financials, infrastructure and materials sectors of the China A-share market.
"iShares is working to bring a fuller suite of ETF products to investors in Hong Kong," said Jane Leung, Managing Director and Head of Asia Pacific Index Equity at BlackRock. "We were the world's first ETF provider to launch ETFs tracking the performance of China A-Share market and we are excited by the overwhelming popularity of our China A-Share Sector ETF series.(3) The two new iShares China A-Share Consumer Sector ETFs address demand from investors for more sector investing opportunities."
The new iShares ETFs begin trading in board lots of 100 units. Listing price will be determined based on the underlying index performance on 19 July 2010.
iShares is the world's largest ETF provider and the leader in China A-Share ETFs in terms of trading volume(4) and assets under management.(5) It was recently awarded "2010 Investment Performance Awards -- Exchange-Traded Funds, Onshore".(6)
(1) "Credit Suisse survey shows Chinese consumer spending jumps", Credit
Suisse
(2) Accessing China A-Shares through ETFs, BlackRock
(3) The four sectors ETFs have a total asset under management of around
HKD2.19 billion as of 17 May 2010.
(4) HKEx as of 7 Apr 2010
(5) ETF Landscape China ETFs Industry Review, Year End 2009, BlackRock
(6) "AsianInvestor 2010 Investment Performance Awards", AsianInvestor,
April 20, 2010
Notes to Editors
About iShares ETFs
iShares is the global product leader in exchange traded funds with over 440 funds globally across equities, fixed income and commodities, which trade on 19 exchanges worldwide. Managed by BlackRock, iShares ETFs are bought and sold like ordinary equities on a stock exchange. iShares ETFs are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost and trading flexibility. Investors can purchase and sell iShares through any brokerage account. ETFs generally can be used to achieve many investment strategies:
-- for buy and hold investing
-- for active traders who wish to take advantage of market movements
-- for investors wishing to hedge the market
-- to enhance returns on cash deposits by equitising
-- as an alternative to futures and other institutional investment tools
For more information, please visit http://www.ishares.com.hk .
About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. With approximately $3.2 trillion under management as of September 30, 2009 (pro forma), BlackRock offers products that span the risk spectrum to meet clients' needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares(R) (exchange traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions(R). Headquartered in New York City, the firm has over 8,500 employees in 24 countries.
For additional information, please visit BlackRock's website at http://www.blackrock.com.hk .
Index Disclaimer
CSI Indices are compiled and calculated by China Securities Index Co. Ltd ("CSI"). CSI will apply all necessary means to ensure the accuracy of the CSI300 Indices. However, neither CSI nor the Shanghai Stock Exchange nor the Shenzhen Stock Exchange shall be liable (whether in negligence or otherwise) to any person for any error in the CSI Indices and neither CSI nor the Shanghai Stock Exchange nor the Shenzhen Stock Exchange shall be under any obligation to advise any person of any error therein. All copyright in the index values and constituent list vests in CSI.
Disclaimer
This press release has been issued in Hong Kong by BlackRock Asset Management North Asia Limited and has not been reviewed by the Securities and Futures Commission. This document is for informational purposes and does not constitute an offer or solicitation to purchase or sell units in any iShares funds, nor shall any units be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Past performance is not indicative of future results. Certain information in this press release may be taken from external sources, which we consider reliable. We do not represent that this information is accurate or complete and should not be relied upon as such. Any opinions contained herein, which reflect our judgment at this date, are subject to change.
iShares(R) is a registered trademark of BlackRock Institutional Trust Company, N.A..
(C) 2010 BlackRock, Inc. All rights reserved.
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IMPORTANT: Investments involve risks, including the loss of principal. Investors should not only base on this document alone to make investment decisions. Investors should refer to the relevant prospectus for further details, including the product features and risk factors. Investors are advised to consider their own investment objectives and circumstances in determining the suitability of an investment in any of the Index Funds described in this document. An investment in an Index Fund may not be suitable for everyone. If you are in any doubt about the contents of this document, you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser for independent financial advice.
-- Each fund described in this document (called an "Index Fund") aims to
provide investment results that, before fees and expenses, closely
correspond to the performance of its underlying Index. Each Index Fund
is subject to concentration risk as a result of investing into a
single country and sector. Additional risks are involved in
investments concentrating within sectors. Adverse developments within
sectors/industries may affect the value of the underlying Securities
in which the Index Fund invests.
-- The Index Funds do not invest directly in China A-Shares but instead
gains access to the A-Share market by investing into China A-Share
Access Products (CAAPs), which are derivative instruments linked to an
A-Share or the Index issued by third parties ("CAAP Issuers"). A CAAP
represents only an obligation of each CAAP Issuer to provide the
economic performance equivalent to holding the underlying A-Shares.
-- The qualified foreign institutional investor ("QFII") policy and rules
are subject to change and any such change could adversely impact the
Index Funds. In the worst case scenario, this could lead to Index
CAAPs not being able to be issued and the Index Funds having to be
terminated.
-- The Manager seeks to manage the exposure to each CAAP Issuer to 10% of
the Net Asset Value of each Index Fund. The Manager may from time to
time, in consultation with the Trustee, seek credit support (such as
cash or listed stock collateral) from any CAAP Issuer (or an
affiliate) in managing the exposure to such CAAP Issuer.
-- The Index Funds are subject to counterparty risk associated with each
CAAP Issuer and may suffer losses potentially equal to the full value
of the CAAPs issued by a CAAP Issuer if such CAAP Issuer fails to
perform its obligations under the CAAPs. Any loss would result in a
reduction in the net asset value of the Index Fund and impair the
ability of the Index Fund to achieve its investment objective to track
the relevant Index. In the event of any default by a CAAP Issuer
dealing may be suspended and the Index Fund may not continue to
trade.
-- PRC withholding tax is not currently enforced on capital gains
realised by QFIIs on the sale of A-Shares. There is a risk the PRC
tax authorities may seek to collect tax on capital gains without
giving any prior warning, and possibly, on a retrospective basis.
Any capital gains tax levied on and payable by a QFII may be passed
on to the Index Funds to the extent that the tax is attributable to
their holdings of Index CAAPs. Certain CAAP Issuers may withhold an
amount equal to 10% of any gain on a CAAP on account of PRC CGT. Tax
provisions are not made at any Index Fund level and therefore any
retrospective enforcement may result in a substantial loss to the
fund.
-- Generally, investments in emerging markets are subject to a greater
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linked to volatility and market liquidity, etc.
-- The Index Funds are traded on the SEHK. Their prices on the SEHK are
based on secondary market trading factors and may deviate
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Email: angela.yeung@blackrock.com
BlackRock
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