The First China-South Korea Co-Compiled Index Product "China-South Korea Semiconductor ETF" is Launched on SSE

On December 22, 2022, the China-South Korea Semiconductor Open-end Traded Securities Investment Fund (hereinafter referred to as China-South Korea Semiconductor ETF) of Huatai-Pinebridge Investments China Securities Index Co., Ltd. and Korea Exchange (KRX) was launched on the Shanghai Stock Exchange (SSE). At the launching ceremony, Wang Hong, member of the Party Committee and Executive Vice President of SSE, delivered a speech, and Sohn Byungdoo, Chairman of KRX, sent his congratulations via video link. On the same day, four China-South Korea co-compiled index ETFs were launched on the KRX.

Wang Hong pointed out that, as the first cross-border ETF investing in the South Korean market and the first China-South Korea co-compiled index ETF in China, the China-South Korea Semiconductor ETF is far reaching for deepening bilateral financial cooperation. This year marks the 30th anniversary of the establishment of diplomatic relations between China and South Korea, the joint issuance and launch of ETF products tracking industry leaders in the two countries by their fund companies is one of the important achievements in implementing the consensus of leaders of two states on deepening economic and trade cooperation. This will boost the quality improvement and upgrading of bilateral capital market cooperation, support the development of industrial and supply chains, and serve the real economy. In December 2021, the SSE and KRX jointly launched 3 co-compiled indexes, namely China-South Korea 50, China-South Korea Semiconductor and China-South Korea New Energy Vehicle. The simultaneous launch of China-South Korea co-compiled index ETF on the SSE and KRX today marks the complete success of the two exchanges' exploration of cross-border product cooperation by jointly developing indexes. With this as an opportunity, the two exchanges are expected to yield greater results in the future.

Sohn Byungdoo said that the simultaneous launch of China-South Korea co-compiled index ETF is a milestone in both countries. Global investors pay great attention to the co-compiled index product launched this time, especially the ETF products that track semiconductor indexes in China and South Korea. Semiconductors have become a necessary element for economic development and technological innovation. The semiconductor industry in China and South Korea is pivotal in the global market. International investors will constantly increase their investment in high-quality semiconductor enterprises in both countries. He expected the China-South Korea Semiconductor ETF to be a representative product of the global semiconductor industry, and would like to see further exchanges and cooperation with the SSE.

In recent years, the SSE's ETF market has seen accelerated development and products of unprecedented number and scale. By the end of November 2022, there were 468 ETF products on the SSE, with an ETF market size of over 1.2 trillion yuan, accounting for about 80% of the domestic market. Since 2022, the SSE has reached about 16 trillion yuan of ETF transactions, ranking first in Asia. In terms of cross-border investment, the SSE's cross-border ETF investment has expanded to the United States, Germany, France, Japan, South Korea, Hong Kong and other countries and regions. With the launch of cross-border Stock Connect mechanisms such as China-Japan ETF Connect and Shanghai-Hong Kong ETF Connect, investors have access to effective tools for global asset allocation. Going forward, under the unified arrangement and guidance of the China Securities Regulatory Commission, the SSE will further expand the depth and breadth of cross-border ETF cooperation, strengthen cross-border index cooperation, improve the ETF Stock Connect mechanism, attract domestic and overseas medium and long-term capital, and promote the high-standard institutional two-way opening-up of the capital market.