Experts sound warning on Chinese ETFs as funds close to new money

Investors have been warned against buying into Chinese tracker funds in the near term as growing interest prompts some groups to close products to new investment.

Last year, ETF providers began launching trackers investing directly in the Chinese A share market – mainland exchanges closely controlled by the Chinese government. Inflows have soared this year as tracker investors anticipate a boost from the coming liberalisation of the market. As of mid-October, foreign investors will be able to access the A-shares market without having to be individually approved by the Chinese authorities. The ETFs are allowed to buy mainland equities because they have access to the renminbi qualified foreign institutional investor (RQFII) scheme, a quota sys...