Shinhan Asset Management Renames and Lists ‘SOL China Jiangsu Small and Medium Enterprises CSI500’ ETF

Investment in Chinese Jiangsu SMEs Expected to Directly Benefit from Reopening

[Asia Economy Reporter Kwangho Lee] Shinhan Asset Management announced on the 26th that it will change the name of the only domestic CSI500 investment exchange-traded fund (ETF), ‘SOL Jungguk Bonto Jungsohyeong CSI500 (Synthetic H) ETF,’ to ‘SOL China Gangso Company CSI500 (Synthetic H) ETF.’

The China CSI500 index tracked by SOL China Gangso Company CSI500 (Synthetic H) consists of relatively small but solid companies. Compared to the widely known CSI300 index among domestic investors, it is characterized by a higher proportion of materials, industrials, and cyclical stocks.

Kim Jeonghyun, head of the ETF Management Center at Shinhan Asset Management, said, “As China’s large-scale reopening (resumption of economic activities) progresses, small and mid-cap stocks have shown more pronounced improvement compared to large-cap stocks during the stock market rebound phase. The CSI500 index consists of mid-sized strong companies with core technological capabilities in China’s domestic industries, and government policy benefits are expected, making it one of the most noteworthy stock indices in the Chinese stock market this year.”

In fact, the SOL China Gangso Company CSI500 (Synthetic H), which recorded -25.94% last year, has risen 9.18% since the beginning of this year. This outperformed the Shanghai Composite Index, which rose 4.76% during the same period. The 1-month and 3-month returns reached 10.93% and 12.26%, respectively.

Choi Wonseok, senior researcher of the overseas stocks team at Shinhan Investment Corp., said, “China is expected to play a leading role in global economic growth by showing higher growth compared to major countries, thanks to a strong consumption recovery and economic normalization after being suppressed for the past three years. The core of this year’s economic policy is expanding domestic demand, fostering advanced manufacturing, stimulating domestic consumption, and government policy support for securing domestic supply chains and advanced technology. Government policies will focus on nurturing small and mid-sized strong companies emphasized by Xi Jinping,” he forecasted.

With this relisting change, SOL ETF has established a distinctive China investment lineup including ‘SOL China Growth Industry Active (Synthetic),’ ‘SOL China Solar CSI (Synthetic),’ and ‘SOL China Gangso Company CSI500 (Synthetic H).’

Center head Kim said, “An investment approach that views China’s market mainly through large-cap stocks may not align with the current situation in China. It is necessary to pay attention to stocks nurtured by the Chinese government’s policies in connection with the reopening and themes leading the global market.”