MSCI's decision to add China A-shares to its emerging markets index is big news. It will expand access to China's mainland stocks to a broader audience and increase exposure to China in that index to nearly 40 percent.
As CNBC estimates, there are some $2 trillion of assets in index mutual funds and ETFs benchmarked against the MSCI Emerging Markets Index today. And analysts everywhere are forecasting billions of dollars in asset flows following the A-share inclusion. This is a big deal in the indexing world.
But the reality is that ETF investors have long had direct access to A-shares. Funds like the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) and the KraneShares Bosera MSCI China A Share ETF (KBA) have offered exposure to China's mainland market since well before the MSCI move.
Both funds also have a relatively strong following. For single-country ETFs — which many still consider too niche or too narrow in focus to truly go mainstream — ASHR is already the fifth-largest China ETF today, with $371 million in assets, while KBA, at No. 7, has $157 million.