China A50 & H50

FTSE China A50 Index Futures

Novice investors interested in investing in China who are unsure where to start buying stocks can consider starting by investing through Chinese stock indices.

What is the FTSE China A50 Index?

FTSE China A50, or FTSE – Xinhua China A50, is a stock index used to measure the performance of the stock market in China. This index was developed by FTSE Russell, part of the London Stock Exchange Group, which is an institution responsible for setting standards and creating stock indices worldwide. Launched in 2003, as an index composed of stocks across all business sectors, it serves as a benchmark for the overall performance of the Chinese economy. The launch of the China A50 index was inspired by investors' interest in benefiting from the significant growth of China's emerging economy.

FTSE China A50 consists of the shares of the 50 largest and most traded companies on the Chinese stock exchange. These are mostly large-cap Chinese companies that hold key importance in China's financial market and economy, such as banking, insurance, and utilities. The index uses a market-capitalization-weighted method, meaning companies with higher market capitalization carry greater weight in the index.

FTSE China A50 is reviewed quarterly to accurately reflect the stock market. The A-shares included in China A50 are companies registered in mainland China. The constituents of the FTSE China A50 index are subject to periodic changes, with companies being added or removed over time according to inclusion and exclusion methodologies and rules. The list of constituent stocks in the FTSE China A50 index changes regularly based on the performance fluctuations of those stocks.

FTSE China H50 Index Futures

Beginner investors interested in investing in China who are unsure where to start buying stocks can consider starting by investing through a Chinese stock index.

What is the FTSE China H50 Index?

The FTSE China H50 Index is a stock index comprising 50 leading Chinese companies listed on the Hong Kong Stock Exchange, including H-shares, Red Chips, and P-Chips. It aims to reflect the overall picture of highly liquid Chinese companies experiencing growth in new economy sectors such as technology, domestic consumption, finance, clean energy, and healthcare.

Examples of Leading Companies in the FTSE China H50 Index:

• Tencent Holdings Ltd.

• Alibaba Group Holding Ltd.

• China Construction Bank Corp.

• Industrial and Commercial Bank of China Ltd. (ICBC)

• Ping An Insurance (Group) Company of China Ltd.

• China Life Insurance Co. Ltd.

• Meituan Dianping

• JD.com Inc.

• China Petroleum & Chemical Corporation (Sinopec)

• China Mobile Ltd.

Highlights of the FTSE China H50 Index:

• Provides access to leading Chinese stocks listed in Hong Kong, ideal for investors looking to invest in highly liquid Chinese companies with high growth potential.

• Helps investors diversify risk compared to indices heavily concentrated in a few large-cap stocks, focusing on fast-growing industry sectors.

• Serves as a highly liquid benchmark index with continuous trading via Futures on the SGX (Singapore Exchange).

• Capping single-stock weighting helps mitigate concentration risk from any individual stock.

• Accurately reflects the overall Chinese economy; although listed on the Hong Kong exchange, constituent companies derive their primary revenue from mainland China.

Therefore, it provides an opportunity for investors to access top Chinese stocks using futures contracts for investment and risk hedging for those investing in the Chinese stock market, enhancing profit potential and enabling better investment diversification.