The ETF created by Singapore’s UOB bank will list in the city state on Nov 14.
It will invest in the Shenzhen stock exchange’s ChiNext market for high-growth tech companies.
The ETF connection is one of a string of such links that China has built in Asia as it opens up capital markets.
In the Singapore-Shenzhen link, UOB Asset Management is working with Chinese manager Ping An Asset Management under a so-called master-feeder structure.
The investors in the Singapore fund are in effect investing in the Ping An ChiNext ETF, which is listed in Shenzhen and has 369 million yuan in assets.
“Through this first-of-its-kind ETF, investors will have the opportunity to access innovative China-based companies in high-growth sectors such as biotechnology and clean energy, managed by a well-established Chinese fund manager with a deep local presence,” said Thio Boon Kiat, group CEO at UOB Asset Management.
A master-feeder structure requires fund managers in the bourses to find a partner and target product in each other’s corresponding markets.
However, Ping An Asset has not yet announced the listing of a product on the mainland to track a Singapore-listed product, which would help bring mainland money into Singapore.
China has already built similar cross-border ETF investment links in Japan, South Korea and Hong Kong to meet growing demand from mainland investors to diversify their assets offshore.
But such schemes have not taken off as well as expected due to strict regulatory requirements in product sizes, investment markets and capital controls by the Chinese authorities.
The Singapore-Shenzhen connect comes about three months after the launch of a similar scheme to connect ETFs in the mainland and Hong Kong, but only four Hong Kong products are qualified for mainland investors due to product size and trading history limits.
Trading volumes into Hong Kong-listed stocks are bigger than those going into the mainland.
No product has been launched yet under a Shanghai and Korea ETF cross-listing after an agreement signed last year.
On the Japan-China ETF link, five Chinese managers have listed products since 2019 with the latest total size of 314 million yuan in local bourses, which feed into Tokyo-listed ETFs.