China International Capital Corporation Hong Kong Asset Management (CICC HKAM) has listed its newly launched A-shares ETF on the Stock Exchange of Hong Kong.
The new CICC CSI Select 100 ETF tracks CSI CICC Select 100 Index, which consists of 100 Shanghai and Shenzhen listed stocks.
Using the multi-factor smart beta methodology, the underlying index for the new ETF selects top 100 A-shares companies based on their return on equity (ROE), dividend yields and earnings growth rates.
One distinctive feature of the index is it strategically ranks and filters stocks based on individual players' sustainable ROEs.
Additionally, fundamental factors – including dividend yields and earnings growth rates – are used to select the top 100 stocks. The individual constituents are then weighted in accordance to their free float market capitalization.
Lin Ning, the company’s managing director, said CICC HKAM is convinced this is the right product for savvy investors to get involved in the Chinese stock market.
The 100 constituents in CSI CICC Select 100 Index consists of stocks of industry front-runners that have solid competitive advantages and can benefit from China's ongoing economic transformation.
As China's economy is transforming into a high-quality growth model, Chinese consumers begin to prefer higher-end products and players in different industries are consolidating and moving up the value chain.
China's economic transformation would benefit industry leaders, particularly those with large capitalisation, as well as dominant players with solid competitive advantages and wide economic moats.
As such, these companies tend to deliver high and sustainable return on equities.
The Index is developed by CICC Research Division, which has comprehensive coverage and in-depth local knowledge of China market.