| In the global securities market, it is not easy for the investors who apply the active strategies to make the return rate of asset portfolio stand above that of market index. Therefore the indexing investment has grown very fast in the recent years. The goal of indexing investment is to copy the target index and to get the average market return rate. The Vanguard 500 index fund appeared first in the world. Its success makes more and more investor accept the idea of indexing investment. Moreover, as a new product of indexing investment, Exchange-Traded Funds (ETFs) have developed in the recent two years. According to the American Investment Company Institute (ICI), ETFs means some kind of fund units that are issued by the investment companies and are priced by the securities exchange markets. To be brief, ETFs are such a package security which deals in the securities exchange as a single stock does.ETFs offer investors the benefits of both bargaining in the exchange and application for purchase and redemption. On the one hand, investors can trade ETFs in the exchange, which is similar to the close fund. They also can sell short and make deposit dealing if the two practices of stock dealing are permitted in the market. On the other hand, investors can apply for and redeem ETFs, which is similar to the mutual fund. But in the process of application for purchase and redemption, investors change fund units and a package stock for ETFs, while investors get fund units and cash in exchange with the regular mutual funds. Furthermore, ETFs fix the minimal amount in applying for purchase and redemption. The deal under the minimal level has to be made in the exchange. In addition, ETFs applies the completely passive investment strategies in order to target some index.Compared with other kinds of funds, ETFs have many particular advantages. Combining the benefits of both close and mutual funds, they offer investors the most convenient deal, the more flexible trade and the lower trade cost, which attach investors to apply ETFs into many investment fields. Moreover, ETFs possess high transparency that makes the market supervision easier, favors the introduction of the rational market investment and also improve the market liquidity. Consequently, ETFs are easily accepted by many participants in the markets.Just because of the above advantages mentioned, ETFs have expandedvery fast recently and become the most conspicuous product in the international capital market and fund industry. Since the first ETFs come forth in the nineties, there are more than one hundred fifty kinds of ETFs in the world, whose capitals reach more than ninety billion dollars. Besides the cradle of ETFs ---- United States, a large number of securities markets in Canada, Europe and Asia have adopt ETFs. So ETFs have become the more and more important part in developing the global fund industry. They also will become a crucial direction of future fund industry. Even though ETFs do not have a long developing history, they have turned into a non-ignorable innovative product in the fund industry because of their strikingly glowing speed in US and their rapidly developing and expanding in the global markets. The great successes of ETFs in overseas markets will definitely influent Chinese fund market. Investigating the ten-year securities market in China, we are considering whether ETFs are suitable for Chinese market, whether it is ready to develop ETFs in China, and how ETFs should be introduced in China. What effects will the introduction of ETFs in China bring on Chinese investors and fund industry? Chinese economy has witnessed rapid develop in the recent years. More and more investors in the world favor the future foreground of Chinese economy. Foreign investors also hope to share the benefits from the increase of Chinese economy. Dow Jones & Company launched Dow-China 88 Index. FTSE also introduced FTSE/Xinhua Index associated with Xinhua Finance. FTSE/Xinhua Index Ltd plans to launch some kind of ETFs targeting FTSE/Xinhua China... |
PDF Full Text Request