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UOB to Launch China A-shares ETF

UOBAM (UOB Asset Management) will list a China A-shares exchange traded fund (ETF) on the Singapore Exchange on 12t November 2009, allowing retail investors to invest in China’s top 50 companies.

This will be the first China A-shares ETF to be listed in Singapore.

UOB Kay Hian, the brokerage arm of UOB, will start offering the ETF to retail investors from 29th October 2009 with an initial target to raise $60 million.

Access to A-shares market in China is traditionally limited to Chinese nationals and Qualified Foreign Institutional Investors (QFIIs) approved by the Chinese regulator.

The United FTSE/Xinhua China A50 ETF will be offered in Singapore dollar denomination and is expected to be priced between S$2.40 and S$2.50 a unit.

United FTSE/Xinhua China A50 ETF Prospectus here

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18 comments
hopeful says 9 years ago

Hi Lioninvestor,

Thanks for the info…

I am interested in UOB SSE50 as it allows us exposure to SSE A shares market directly.

My concern: Is SSE “safe” in terms of regulation. Can UOB SSE50 etf be “clobbered” just like Malaysia?

How is the structure of UOB SSE50 different from Lyxor Entreprise or Ishares A50 2823.hk? It seems to me that UOB SSE50 etf structure is more complicated (e.g P-notes issue, counterparty risk and QFII investment quota, etc).

In your opinion, if you want to invest in SSE Ashares, will you purchase UOB SSE50 etf?

Lastly to you and intheknow and all,

Merry Christmas and Happy New Year
You all have done an excellence job in educating the public about financial issue.

Reply
hopeful says 9 years ago

Hi all,

It is exciting that singapore investors can participate in China growth through UOB ETF.

However, I notice that for this ETF, there are many fees and charges payable (from prospectus).

Manager’s fee (Current: 0.45% pa and max 1.5% pa)
Trustee’s fee (Current: 0.10% pa and max 0.25% pa)
Maintenance’s fee (Current: 0.30% pa)
P-Notes transaction fee (Current: 0.40% per transaction)

Can I say that yearly fees and charges by the fund is at least 0.85% (0.45+0.10+0.30)? If P-Notes transaction fee is included, the yearly fees and charges will be higher than 0.85%.

In terms of fees and charges, can I say Lyxor China Enterprise is better as this ETF charged 0.65% pa and max is 0.65%?

Anyone want to comment on the pros/cons of UOB China A-shares ETF versus Lyxor China Enterprise H-shares ETF?

Thanks

Reply
    lioninvestor says 9 years ago

    Hi hopeful,

    Comparing the expenses, it will be 0.65% vs 0.85%. There isn’t a p-notes transaction fee for lyxor but the underlying may still incur transaction costs when they buy/sell the underlying stocks.

    However, note that ultimately, these 2 track different indexes.

    Lyxor tracks the Hang Seng China Enterprises Index (Hong Kong listed H-shares of China enterprises).

    UOB tracks SSE 50 index, which represents the 50 largest stocks of good liquidity listed on the Shanghai Stock Exchange (SSE).

    Reply
Paul C says 9 years ago

Hello,

Anyone can predict what will be the opening price for the China A Share ETF (UCA50ETF) on this Thursday? =)

Rgs,
p.C

Reply
Paul C says 9 years ago

Hi,

I applied for the ETF from ATM. Can any one tell me how will I know I have been allocated the shares. How to check? Thanks.

Rgs,
pC

Reply
    lioninvestor says 9 years ago

    Hi Paul,

    you can check your CDP account online or wait for the CDP statement to arrive.

    Reply
Paul C says 9 years ago

Hi,

I am interested to apply for the A share. But my trading account is linked to OCBC. What should I do?

Rgs,
p.C

Reply
    lioninvestor says 9 years ago

    Hi Paul,

    You can wait for it to be available on the open market.

    Reply
VY says 9 years ago

China A50 ETF will invest into a type of market access product known as participatory notes (the “P-Notes”), instead of investing directly into A-Shares, would like to seek your professional comments on what’s the return prospect and potential risk involved?

Thanks.

Reply
    lioninvestor says 9 years ago

    Hi Vy,

    There will be a certain amount of exposure to the counterparty risk of the P notes issuer.

    Reply
c&C says 9 years ago

Hi,
It’s my first time to buy units of ETF. i plan tol apply it through UOB ATM. but i have few questions and need your advice. thanks.
a) how to sell the units in future? by myself or must through participating broker?
b) what the cost if i hold (keep) the units
c) what the cost when i sell it in future?

Reply
    lioninvestor says 9 years ago

    Hi C&C,

    the ETF is traded like normal shares. You can sell through any stock broker. Normal brokerage applies. Typically 0.275% (min $25) if traded online + GST + CPD clearing charges. Cost of ETF is in-built so you don’t need to fork out any cash for holding.

    Reply
Bao says 9 years ago

How to buy UOB China A-shares ETF?

Reply
    lioninvestor says 9 years ago

    Hi Bao,

    investors can apply for units of the ETF via UOB ATMs or through the participation dealer, UOB Kay Hian Pte Ltd (either directly or through a stockbroker), subject to applicable terms and conditions. Where an investor is submitting his application to a Participating Dealer through his stockbroker, that investor should contact his stockbroker for the applicable deadline for such submission. The minimum subscription during this period is 1,000 units. Upon listing, the ETF will be quoted and traded in board lots of 100 units.

    Reply
      Bao says 9 years ago

      I do not have UOB account and ATM card, neither do i have account with UOB Kay Hian Pte Ltd. I won’t be able to buy during IPO. BTW, do you think is it worth to invest in UOB to Launch China A-shares ETF?

      Reply
        lioninvestor says 9 years ago

        Hi Bao,

        You can always buy after it is listed even if you can’t apply now.

        As to whether it is worth it to invest, it will depend on whether you are bullish on the China stock market.

        Reply
coffee-o says 9 years ago

Hi Lion Investor

Like to consult you:
a. Will the UOB ETF pay dividence?
b. How the exchange rate between S$ vs CNY affect the value of the ETF ?

Thanks

Reply
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