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What are the CSI 300 Index Tracking Products and Their Significance to CSI 300 Stock Index Futures?
2010-11-24

 

After the launch of the CSI 300 Index, the Shanghai Stock Exchange, the Shenzhen Stock Exchange and China Securities Index Co., Ltd. have been committed to the development of index derivatives. By the end of 2007, the CSI 300 Index had become the performance benchmark of 48 funds, with the tracking assets of RMB766.3 billion; the CSI 300 Index had become the underlying investment of 5 index funds, with nearly RMB100 billion tracking assets. The CSI 300 Index, by far with the largest amount of tracking assets and the widest usage on the securities market of China’s mainland, was chosen as the performance benchmark by 37 funds out of the 54 stock funds launched in 2007 on the securities market of China’s mainland. W.I.S.E. - CSI 300 China Tracker (2827.HK), the first ETF tracking the CSI 300 Index, was popular among the overseas investors since it was listed and traded on the main board of the Stock Exchange of Hong Kong Limited on July 17, 2007, with its assets increasing eight times one week after its listing.

 

The CSI 300 Index funds, which track the CSI 300 Index, mainly invest in the constituent stocks and alternative constituent stocks of the underlying index. The funds carry out passive indexation investment and effectively track the CSI 300 Index by controlling the tracking errors between the funds and the underlying index. With no direct access to the purchase or sale of the index on the part of the investors who find it hard to fully copy the portfolio according to the weight, the index funds provide a good hedging and arbitrage tool for the CSI 300 stock index futures.

 

Source: China Securities Index Co., Ltd.