Market Turmoil Slows China's Advance in Key Stock Index
24 March 2020 - 6:09PM
Dow Jones News
By Quentin Webb
One of the world's biggest index providers is slowing the
inclusion of Chinese stocks in its global benchmarks, sparing
investors from making big changes to their portfolios during a
period of market turbulence.
Last June, FTSE Russell began adding stocks listed in mainland
China to some of its major indexes, including some widely followed
emerging-market benchmarks. The inclusion was supposed to be a
three-stage process that would be complete this month, driving as
much as $10 billion of inflows from passive fund managers into
China's stock market, the company earlier estimated.
This week, FTSE Russell, which is part of LSE Group, said stocks
listed in Shanghai and Shenzhen have reached 70% of their final
weighting in its indexes and the remaining 30% will only be added
in June. It said client feedback persuaded it to introduce this
delay.
FTSE Russell previously estimated that Chinese stocks would make
up 5.6% of its FTSE Emerging Index when fully included. That was
before the plunge in global stock markets in the year to date.
U.S. asset manager Vanguard Group has multiple funds that track
FTSE indexes. Its FTSE Emerging Markets exchange-traded fund had
net assets of nearly $86 billion at the end of February.
Write to Quentin Webb at quentin.webb@wsj.com
(END) Dow Jones Newswires
March 24, 2020 02:54 ET (06:54 GMT)
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