(Yicai Global) May 9 -- China Merchants Fund Management and two other Chinese fund managers will each issue an exchange-traded fund based on China Securities Index’s Guoxin Central-SOEs Shareholder Return Index next week to raise as much as CNY2 billion (USD288.7 million) each.

The funds received the go-ahead from the China Securities Regulatory Commission on April 27. Nine fund managers submitted applications for funds based on investment-type indexes of central state-owned enterprises in March.

“Dividend levels at central enterprises are significantly higher than that of the overall market,” Yan Yang, a manager at China Universal Asset Management, one of the two other firms, told China Securities Journal. “For example, the CSI China Reform Central State-Owned Enterprises Composite Index posted a dividend rate of 3.14 percent last year, one percentage point higher than the CSI All Share Index.”

The profitability of listed central and state-owned enterprises is more stable than the Chinese mainland share market as a whole, according to Liu Chongjie, a fund manager at China Merchants Fund Management. “It is likely they can better meet the needs of institutional investors and individual pension allocation,” he noted.

The China Securities Journal’s report also cited sources as saying that reviews of other products related to central enterprises investment-type indexes are still under way.

Editor: Peter Thomas