Managers: MSCI A-share inclusion opens up opportunities in 'superior' companies

Added to indices last week

The phased inclusion of domestic China A-shares in MSCI indices will open up more diversified opportunities in sectors such as consumer and healthcare, as well as potentially unleash $500bn of passive fund assets into the market, said fund managers as they welcomed last week's move.

Chinese A-shares, which trade in renminbi, were included in the MSCI indices for the first time on 1 June, with an initial 234 added and up to 5% set to be included this year. The first round of A-shares will make up 0.8% each of the Asia Pacific ex Japan and Emerging Markets indices. It will also bring China's overall weighting in the Emerging Markets index up to 31.3%. Full inclusion, which is dependent on the success of the initial round and would be a phased process over an as yet unknown timeframe, would lead to 3,400 names being included with a market cap of $8.5trn. As a res...