Money

Barclays in talks with China funds on ETFs

(Agencies)
Updated: 2010-07-06 11:21

Barclays Capital is in talks with several Chinese fund managers to develop cross-border exchange-traded funds (ETFs) to be listed on the Shanghai bourse as China seeks to widen channels for its growing yuan savings.

Barclays Capital, the investment banking arm of Barclays Bank Plc, said on Monday that the Shanghai Stock Exchange had approved 19 of its fixed-income indexes, including the Barclays Capital Global Treasury Bond Index, to be used in ETF products developed by Chinese fund management firms.

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ETFs are index funds that trade just like stocks on major stock exchanges.

"The next step will be working with asset managers to develop the products, and we are in discussions with some local asset managers," Waqas Samad, Head of Index, Portfolio and Risk Solutions of Barclays Capital, told reporters in Shanghai.

The first Shanghai-listed fixed-income ETF based on Barclays' indexes could be launched this year or early next year, Samad said.

China hopes to launch its first cross-border ETFs, which will be based on indexes linked to offshore markets, as soon as this year as part of plans to broaden investment options for domestic investors, officials have said.

In 2006, China launched the Qualified Domestic Institutional Investor scheme, under which domestic funds are allowed to invest their clients' money in overseas markets, and regulators are also discussing allowing foreign companies to list in Shanghai.