PowerShares May List China A Shares ETF
Invesco's (NYSE: IVZ) PowerShares, the fourth-largest U.S. ETF sponsor by assets, has filed plans with the Securities and Exchange Commission to possibly list the PowerShares China A-Share Portfolio, an ETF that would look to provide U.S. investors with exposure to China's A Shares market.
The filing did not include a ticker or expense ratio.
The PowerShares China A-Shares Portfolio will mainly invest in index futures that provide exposure to the China A-Shares market, including futures contract on the Singapore Exchange on the FTSE China A50 Index.
Should the fund come to market, it would be locked in an immediate rivalry with the Market Vectors China ETF (NYSE: PEK), which debuted in October 2010 and now has $16.8 million in AUM. PEK uses swaps and derivatives to track the CSI 300 Index.
PEK has often traded at an elevated premium to its indicative value because of the swap agreements Van Eck must enter into with a counter-party so that the fund can accomplish its objectives. PEK's premium has started to shrink, coinciding with news announced earlier this month that the China Securities Regulatory Commission boosted the quotas for qualified foreign institutional investors to $80 billion from $30 billion.
As Benzinga reported last week high quotas for qualified foreign foreign institutional investors could imply China is warming to increased foreign investment, though it should be noted PEK is still barred from directly owning A shares and the same would apply to the competing PowerShares product should it debut in the near-term.
PowerShares current lineup of China-specific ETFs includes the PowerShares Golden Dragon Halter USX China ETF (NYES: PGJ) and the PowerShares Chinese Yuan Dim Sum Bond ETF (NYSE: DSUM).
For more on the China A shares market, please click HERE.
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