S&P 500-based ETF to be offered to Chinese investors
SAN FRANCISCO (MarketWatch) -- Standard & Poor's said Thursday it has licensed its flagship S&P 500 for an exchange-traded fund based on the index to be made available to investors in China.
"This landmark agreement will allow Chinese investors to directly track the returns of the U.S. equity market while providing an important index solution for their portfolio," S&P said in a statement.
S&P, a unit of McGraw-Hill Cos. (MHP 36.10, +0.32, +0.89%) , said it will license the S&P 500 to Bosera Asset Management Co. for the ETF.
Bosera describes itself on its Web site as "one of the first five fund-management companies established in China," and as "one of the largest asset-management institutions in China, with a complete set of business licenses."
Standard & Poor's said the S&P 500 has nearly $1 trillion directly indexed.
The firm said over 32 ETFs have been launched in six different markets in the past year based on its indices.
"China, as well as all of Asia Pacific, is of strategic importance to Standard & Poor's as we continue to aggressively grow our international index business," the firm said.
This could have a significant impact US equity markets. Capital has been effectively trapped within China for the last couple decades which saw relatively high growth rates. With a private savings rate exceeding 20%, the ability for Chinese citizens to buy American stocks rather than just investments within China seems ground-breaking.
