China unveils new blue-chip index in bid to boost investment in Beijing listings

investmentweek.co.uk:

This new index features a less heavy financial skew, instead aiming for a greater balance, with a higher allocation towards healthcare and new energy companies.

The index is comprised of 50 sector leaders listed in the Chinese capital, separating itself from the closely watched CSI300 and Shanghai Composite indices, which act as China's main benchmarks.

This new index features a less heavy financial skew, instead aiming for a greater balance, with a higher allocation towards healthcare and new energy companies.

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Since its launch on Tuesday (2 January), fund managers have rushed to launch trackers of the index, with at least ten mutual fund companies, including JP Morgan Asset Management's local retail business, Fullgoal Fund Management Co and E Fund Management, applying for new passive portfolios, according to regulatory filings noted by the FT and Reuters.

The launch follows a lacklustre 2023 for Chinese equity focused funds, with China funds representing 42 out of the 43 worst performers of the year, according to Quilter Cheviot data.

The aforementioned Chinese indices slumped during the year, with the CSI 300 index down 11% for the period, and the Shanghai Composite benchmark losing just over 7%. This compared to the US' main S&P 500 benchmark, which returned around 18%, thanks largely to the rally of its ‘Magnificent Seven' stocks.

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