May 23, 2011 (China Knowledge) - The China Listed Funds Forum 2011 was recently held in Shenzhen of China's Guangdong Province, and some participants are optimistic about the development of exchange traded funds in China in the future, sources reported.

Joseph Ho, managing director & head of Exchange Traded Funds, Asia Pacific, Credit Suisse Asset Management, said at the forum that China has fully played its conscious dynamic role in the financial innovation field. Each market has its own financial mechanism, so the way to success is different.

Some overseas experts engaged in investment said that the development speed of ETFs last year has surpassed that of mutual funds.

Li Wanwen, chief manager of BlackRock, one of the world's preeminent asset management firms, said the net inflow of ETFs in the global market was US$170 billion in 2010, while the net outflow of mutual funds was US$130 billion. ETFs have attracted lots of investors worldwide, according to statistics on money flow since 2006. However, the prevalence rate of ETFs in the Asia-Pacific region is still lower than in the U.S., which means there is wide space for ETFs to expand in the future, especially in China, one of the most important economies in the Asian market.

The Shanghai Stock Exchange is expected to list ETFs tracking the Hang Seng Index or Hang Seng China Enterprises Index this year, according to an announcement made at a May 13 conference on the development of ETFs and other index products, jointly organized by the Hong Kong Exchanges and Clearing Ltd<0388> and the SSE.

Wang Lin, director-general, Department of Fund Supervision of the China Securities Regulatory Commission, said the final plans on the cross-border ETFs will be announced after the preparatory work is finished, sources said.

Shenzhen Stock Exchange's first ETF started trading in 2006 after the SSE offered mainland China's first ETF in 2005.