China Post Global to launch onshore China UCITS ETF
News came this week that China Post Global has listed the Market Access iSTOXX MUTB Japan Quality 150 Index UCITS ETF (MAJQ LN) on the London Stock Exchange (LSE).
March 2016 saw RBS’s ETF range Market Access move to China Post Global, in a transition that in a former ETF Express interview with managing director Danny Dolan (pictured) was described as ‘smooth’.
That move brought EUR360 million in ETF assets over to China Post Global and those original ETFs plus the new launches have seen assets grow towards EUR500 million with the expectation of further growth as new products are launched.
Also new to the firm is the October hire of sales director, Geoffrey Post, who brings extensive experience promoting Asian ETF strategies. Dolan says: “We remain a niche player but we would like to be influential within those specialisms which are commodities, Asia and smart beta strategies.”
The firm has nine UCITS ETFs in total at the moment but plan more. The Japan Quality ETF has attracted EUR30 million in investment since its late May launch with investors keen to familiarise themselves with this different approach, the firm says.
Dolan describes it as a bit different from existing Japan ETFs on the market. Post explains that China Post Global is targeting investors in the UK, Switzerland, Germany and Austria and is also registered in other markets including Italy, the Netherlands and Luxembourg.
“Our target type of investors are sophisticated institutional investors including wealth managers, multi asset managers, private banks, insurance companies and pension funds,” Post explains.
“Clearly there is a consistent story from my perspective as I continue to find Japan a very interesting market that has a lot of potential and probably a market that western investors haven’t paid a lot of attention to in the last decades. In fact, many have benefited from being underweight Japan equities.
“That phase has passed and we are in a different environment, so a lot of what I am doing is talking to investors about how they see Japan and about their views on Japan. What we are looking at here is something innovative and quite different from what is available in the market.”
Post reports that the feedback he gets from the marketplace is that there isn’t a lot of choice for investors who are going into Japan and Asian markets generally.
“In the ETF world there is not a lot of choice in Japan as most focus on the broad market cap weighted indices. In Europe, there is lots of choice in terms of factor exposures but what we are trying to do is respond to that feedback and give people some innovative exposure which fits in the continuum between vanilla cap weighted index exposures and active managers at the other end of the spectrum.”
Dolan says that the pipeline of new products for China Post Global is diverse, with further specialist products that add value in their particular space.
“We want to provide investors with an investment that wasn’t available to them previously, that is differentiated, and that is a common theme for all our forthcoming launches.”
The next launch is an onshore China ETF but different to the existing products. “We have had very healthy advance interest from investors confirming these are products that people have been looking for and are not able to access currently in the UCITS or ETF format,” Dolan says.