What Is an International ETF?

Cross-border ETF refers to an ETF that is listed on a domestic stock exchange with an overseas market index composed of overseas capital market securities as the tracking target. It is a kind of fund. ETF is the abbreviation of Exchange Traded Funds.

Cross-border ETF

Right!

Cross-border ETF refers to an ETF that is listed on a domestic stock exchange with an overseas market index composed of overseas capital market securities as the tracking target. It is a kind of fund.

In the development of ETF in the past two decades, products have been continuously innovated.

There are three types of cross-border ETFs: cross-listing model, linked fund model, and independent establishment model.

Cross-listing mode refers to the development and management of overseas fund management companies and

Differences between cross-border ETFs and domestic ETFs

Due to differences in foreign exchange management systems, trading systems, and trading time differences between ETFs in different markets, cross-border ETFs apply for redemption mechanisms,

On July 9, 2012, China launched the first cross-border ETF product, namely China Hengsheng

Investors can either

Since the Hang Seng ETF is a cross-border product, the transaction efficiency is that the ETF shares purchased on T day can be sold on T + 2, and the ETF shares purchased on T day can be redeemed at the time, which is different from domestic ETFs. However, because the manager can trade Hong Kong stocks in real time on the T day, the product still has a two-way primary and secondary market.

The emergence of domestic cross-border ETFs has further diversified the market's investment varieties, providing an effective channel for institutional and individual investors to participate in overseas market investments and share the rise of overseas markets, and has also increased investors' arbitrage investment targets.

The emergence of cross-border ETFs in the domestic market is not only good for investors, but also for other participants in cross-border ETFs, such as fund companies and securities firms. Therefore, the development and management of cross-border ETFs and participation in the operation of cross-border ETFs are highly valued by fund companies and securities firms.

For fund companies, the development and management of cross-border ETF products will undoubtedly directly open up a large number of new customers, rapidly increase the company's fund asset management scale, increase the company's operating profit, and also improve the company's product line and showcase the company's product development and design. , Management, and operation capabilities to help enhance the company's brand effect. It can be seen that the benefits of developing and managing cross-border ETF products for the development of fund companies are very direct and obvious. At the same time, in the highly competitive public fund, the differentiation of fund products is an effective strategy and method to enhance the competitiveness of fund companies and products.

The emergence of cross-border ETFs has three main values for brokers: First, it increases its brokerage business and provides more investment varieties for its clients; second, because brokers have obvious advantages in terms of transaction costs, trading channels, and research capabilities, The emergence of cross-border ETFs can increase investment opportunities and arbitrage opportunities for brokerage firms. Third, brokerage firms can develop other products related to cross-border ETFs to increase their profitability.

In the future, as the development and management of domestic cross-border ETFs gradually matures, I believe that the tracking targets of domestic cross-border ETFs will also expand from the China Hong Kong market index to the US market index, the European market index, the Japanese market index, the China Taiwan market index, and the Australian market index and many more. Cross-border ETFs have opened up efficient channels for investing in overseas capital markets, enriched the variety of investments in the domestic market, developed the domestic fund industry, and participated in various parties to cross-border ETFs such as investors, fund managers, brokers, and index authorizers. Are all positive.