Are you ready for China A shares?
categories: Asset Allocation and Asset Liability Management, Investing (Investment Management), Asset Owners, Equities, Research Paper, CHIA Chin-Ping, Asset Managers (Quant or Fundamental), Zhen Wei
MSCI’s recent announcement that it will add 222 China A shares to its key benchmarks raises practical questions for global and emerging market investors: How does it affect their investment policy? How can they implement these exposures (whether or not they already have China A shares in their portfolios)? While inclusion of China A shares is a year away, institutional investors may want to start planning for how this change may affect their portfolios. Longer term, if China continues to liberalize the A shares market and MSCI were to fully include them, China’s weight in the MSCI Emerging Markets Index could rise to 40.8% from 28% currently.