(Yicai) Jan. 23 -- Chinese investors have been pouring money into cross-border exchange traded funds amid a stock market slump at home, and attention is now shifting to US ETFs after a warning by the issuer of the biggest China-listed ETF tracking Japan’s Nikkei 225 Index.

The MSCI US 50 ETF [SHA: 513850] issued by Guangzhou-based E Fund Management surged by its 10 percent daily trading limit for a second straight day to close at CNY1.286 (18 US cents), representing a 20 percent premium over its latest net asset value reference.

Other ETFs tracking the Nasdaq and S&P in the United States and the Nikkei 225 in Japan also climbed today.

Both the US and Japanese stock markets has hit record highs, fueling enthusiasm among Chinese investors for cross-border ETFs. But due to the small issuance scale of these products, they face higher premiums and are at greater risk of making a loss.

Last week, the China AMC Nomura Nikkei 225 ETF [SHA: 513520] issued by China Asset Management had an intraday premium of more than 20 percent because of the influx of investors. The fund manager has suspended trading in the ETF several times and warned investors of the risks involved.

During trading today, the Nikkei 225 rose 1.2 percent to 36,984.51, a 34-year high, before dipping 0.1 percent to close at 36,517.57. Yesterday, the Dow Jones and the S&P hit all-time highs, rising 0.4 percent and 0.2 percent, respectively, at the close.

Compared with Japan and the United States, the Chinese stock market has been sluggish. At today’s close, the benchmark Shanghai Composite Index rose 0.5 percent to 2,770.98, but is still down nearly 7 percent this year.

Editors: Dou Shicong, Tom Litting