China Asset Management CSI 300 exchange-traded fund surpasses Blackrock iShares fund

A Chinese exchange-traded fund has surpassed BlackRock’s ETF to become the largest tracking onshore stocks as investors look to ride a surge in equities while skirting a US clampdown, Bloomberg reports.

China Asset Management (Hong Kong) CSI 300 Index ETF grew to US$2.7 billion in assets as of Tuesday, surpassing BlackRock’s iShares fund tracking the FTSE A50 China Index.

Investors are shifting to the Chinese-owned CSI 300 index fund partly to avoid U.S. sanctions, which forced New York-based BlackRock to unload shares in popular telecom stocks such as China Mobile. Buyers have also been attracted to the index’s broader holdings, compared with the finance-heavy FTSE A50, said Max Lan, Hong Kong-based portfolio manager at China Asset Management.

“While our ETF products with Chinese firms in the investment ban are not suitable for U.S. investors at the moment either, we have seen strong demand from non-U.S. investors, from countries in Asia and Europe,” Lan said.

BlackRock, the world’s largest fund manager, has been selling stakes in three Chinese telecommunication providers including China Telecom Corp., after the U.S. put them on its sanctions list over alleged national security concerns.

Representatives for BlackRock didn’t respond to a request seeking comment.

The sanctions have had little impact on the shares, with China Mobile and China Telecom both jumping by more than 7 percent already this year.