Aaron Saldanha and Supriya Rathore

(Reuters] – European fund manager Amundi intends to launch an ETF that will allow investors to get exposure to emerging markets. The announcement comes amid ongoing regulatory crackdowns, slowing growth, and wider market uncertainty.

Chinese regulators have issued a series of rules that target a variety of sectors, including technology and private tutoring. They have also taken billions out of global investors’ holdings.

Ashley Fagan from Amundi, global head ETF and indexing, said that investors are seeking to make more accurate allocations due to the high weighting of China within broad EM indices.

According to https:// data, China’s stocks account for a third in MSCI Emerging Markets Index.

Fagan stated that an ETF on EM ex China will be launched in the next few weeks. He said it had been co-developed by a client.

Large international investors are divergent about their views on China.

George Soros (a multi-billionaire) and Cathie Wood from ARK Invest have warned against holding assets within the country. Others, such as BlackRock, NYSE:, and Ray Dalio of Bridgewater Associates remain positive, however.

Outside China, Amundi – which managed about 1.79 trillion euros ($2.07 trillion) in assets as of June 30 – is also seeing investors cut their exposure to U.S. equity benchmarks such as the S&P500, shifting instead to stocks with strong fundamentals as well as those in the financial sector.

Graphic: Quality, Financial stocks and the https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnoowapq/Pasted%20image%201634132892721.png

Institutional investors have also shown strong interest in ETFs that focus on Environmental, Social, and Corporate Governance measures. ESG accounts for 50% of Amundi’s net fixed income inflows over the first nine months of 2021, which is 14 billion euros.

Fagan stated that any new product launch is first viewed through the ESG lens in order to determine if it can be launched as a sustainable fund. Then we collaborate with index providers to validate existing indices and develop custom-tailored approaches for client needs.

($1 = 0.8664 euros)

The interview took place in the Reuters Global Markets Forum. This chat room is hosted on Refinitiv Messenger. Sign up here to join GMF: https://refini.tv/33uoFoQ)); Reporting by Aaron Saldanha, Supriya Rangarajan and Lisa Mattackal in Bengaluru; Editing by Sweta Singh and Anil D’Silva)