A Chinese fund management firm, GF Fund Management, has signed a letter of intent for an index product licence to create exchange traded funds (ETFs) based on the FTSE/JSE Top 40 index.
An ETF is an investment fund traded on stock exchanges, just like stocks. These products can hold assets such as stocks, commodities or bonds.
The letter of intent, which signifies closer ties between South Africa and China’s financial markets, was signed during the inaugural South Africa China Market Forum held at the JSE today (8th August 2013).
The FTSE/JSE Top40 Index, an index within the FTSE/JSE Africa Index Series, consists of the 40 largest companies on the JSE by market capitalisation. “We are very pleased to initiate this letter of intent which will allow for the first direct launch of an exchange traded product in Asia. This will give Chinese investors exposure to South African companies while giving our companies exposure in a very important emerging market,” says Ana Forssman, Director of Market Data at the JSE.