JPMorgan creates China A-shares strategic beta index
Asset manager behemoth JPMorgan Asset Management and Chinese index provider the China Securities Index (CSI) have partnered to launch a China A-shares strategic beta index.
The CSI JPMorgan Yangtze River Delta Area Strategic Beta Index will begin on June 10.
The index will seek to capitalize on a particularly vibrant region connected with China A-shares: the Yangtze River Delta Region, which had more than 1,200 publicly listed A-share companies in 2018, representing 34 percent of China’s listed firms. The region is home to major cities such as Shanghai, Nanjing and Hangzhou as well as two free-trade zones.
The index will leverage JPMorgan’s multi-factor strategic beta framework, which is already deployed on around $3.5 bn in assets globally. From the 1,200 Yangtze River Delta stocks, the index will include around 150 equities that rank highly on the JPMorgan multi-factor screening process. In order to be selected, stocks must be trading on attractive valuations and have good liquidity.
‘China A-shares are a deep and liquid market with low correlation to other equities markets. They are rapidly becoming a more integral part of global investor portfolios,’ says Philippe El-Asmar, Asia-Pacific head of beta strategies at JPMorgan Asset Management, in a statement. ‘With expanding market liberalization and greater flagship index inclusion, investors are seeking more efficient and effective ways to access this market.
‘JPMorgan Asset Management’s ongoing investments in China reflect our long-term and strategic commitment to one of the largest, fastest-growing and most exciting markets in the world.’