E Fund Management, one of the largest fund management firms in China, has expanded its stable of offerings in Hong Kong with the launch of "the first cross-market RQFII ETF in the world."

In a statement, the firm said that E Fund CES China 120 Index ETF is now part of the Hong Kong Stock Exchange and invests all of its assets across 120 stocks underlying the CES China 120 Index. The passively managed ETF offers an investment return that is similar to the performance of the China 120, which consists of the 80 largest and most liquid A-shares in terms on market value trading on either the Shenzhen or Shanghai stock exchanges.

E Fund noted that the product is the first cross-border ETF to express the "Greater China" concept, which aims to boost cooperation between the stock exchanges in Mainland and Hong Kong markets. 

To-date, there are eight RQFII ETFs on the Hong Kong market, all investing in A-shares. Similarly, all cross-border ETFs on the Mainland invest only in H-shares. In short, the new fund resolves clearing issues across A-share and H-share markets and currency exchange problems of investors holding both RMB and Hong Kong dollar currencies.