Investors in China and Japan can now invest in each other’s stock markets through cross-border exchange-traded funds (ETFs) listed on stock exchanges in both countries.
Four cross-border ETFs were listed on the Shanghai Stock Exchange on Tuesday, under the new China-Japan ETF Connectivity program. The funds were set up by four Chinese fund management firms to invest in Japanese ETFs that track local stock indexes, including the Tokyo Stock Price Index and the Nikkei 225.
Meanwhile, two ETFs set up by Japanese firms listed on the Tokyo Stock Exchange on the same day will invest in two Chinese ETFs tracking the SSE 180 and CSI 500 indexes respectively. The other two Japanese ETFs involved in the program, which were listed on the Tokyo bourse in 2007 and 2008, invest in Chinese ETFs separately tracking the SSE 50 and CSI 300 indexes.
“I am pleased that we now have ETFs forming a two-way bridge between the capital markets of Japan and China,” said Akira Kiyota, CEO of Japan Exchange Group Inc., which operates the Tokyo exchange. “If we consider the sizes of these two capital markets, this may only be a small step today, but it is surely a significant step with immense potential for the future.”