The world’s biggest money manager BlackRock is expected to launch its first China ETF by the end of the year and has started to hire the requisite staff, according to two people with direct knowledge of the matter, reports Reuters. BlackRock, which thrives on the rise of passive investing with 70% of its $10 trillion global portfolio in exchange-traded funds (ETFs) and index funds, will be the first wholly owned foreign fund manager to tap the $220 billion onshore Chinese ETF market.
Currently, the US firm manages overseas assets of a handful of China’s large state-backed investors such as the country’s sovereign wealth fund and national pension fund via offshore units, as all products sold are foreign-domiciled.
The first BlackRock ETF product launch is scheduled for the fourth quarter, said the people, which will add to RMB 6.8 billion ($1.07 billion) worth of assets BlackRock manages through two mutual funds with investments in Chinese and Hong Kong stocks. Several index providers have started talks with BlackRock but the fund manager is yet to decide which index to track for the first ETF product, the people said.