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Italian asset manager Azimut Group and China Universal Asset Management are teaming up to launch an exchange traded fund that will be listed in Abu Dhabi as well as a second ETF in Shanghai to give Chinese and United Arab Emirates investors access to each other’s equities markets.
Azimut Group will launch an ETF on the Abu Dhabi Securities Exchange that will invest in China Universal AM’s existing Shanghai-listed ETF tracking the CSI A500 index, Azimut confirmed.
In turn, China Universal AM will roll out an ETF to be listed on the Shanghai bourse that will feed into a separate Abu Dhabi-listed ETF that Azimut plans to launch. It will invest in public companies in the pan-Arab region.
Azimut expects to launch the Arab company-tracking ETF by the third quarter in 2025, based on an index that covers large, liquid stocks, the spokesperson told Ignites Asia.
This article was previously published by Ignites Europe, a title owned by the FT Group.
The pair of new ETFs will become part of an ETF connect programme between China and the UAE, Azimut said.
China has stepped up financial co-operation with Middle East nations over the past few years, and has used ETFs as a way to facilitate cross-border capital flows and closer corporate ties, as it seeks to reinforce the message of further opening up its financial sector.
The Shenzhen Stock Exchange and Dubai Financial Market in August signed a memorandum of understanding to promote cross-border investing in China and the UAE, and explore co-operation in products including ETFs.
That agreement was followed by the Shanghai stock exchange, which said earlier in December that it had signed an MOU with the Qatar stock exchange to explore potential co-operation in areas such as ETFs, data and index products.
The first two ETFs listed in China that invest solely in Saudi Arabia’s equities market, launched by Huatai-PineBridge Fund Management and China Southern Fund Management, enjoyed strong initial demand when they were listed in July this year.
They feed into CSOP Asset Management‘s CSOP Saudi Arabia ETF, the first Saudi equities market-focused ETF in the Hong Kong exchange, which was launched last year and attracted US$1bn in initial investment.
China is rapidly expanding ETF tie-ups with other major financial hubs around Asia.
The Monetary Authority of Singapore said last month it was in talks with its Chinese counterpart to expand the number of ETFs on a cross-listing scheme linking Singapore and Chinese exchanges
Announced in late 2021 to connect ETFs in the Singapore and Shenzhen bourses, the cross-listing programme was expanded in 2023 to cover the Shanghai exchange.
Although only seven ETFs had been launched in the scheme by the end of November, amid difficulties in reaching commercial agreements between fund firms and a weak Chinese market that slowed product pipelines, industry participants expected new product launches to pick up in 2025.
Russell Wang, head of securitised products for global markets at the Singapore Exchange, said the expectation of further government reforms and a rebound in China’s onshore markets meant ETF issuers were now readying more products for next year.
*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.
