Market Overview

New Frontier For Chinese ETFs

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New Frontier For Chinese ETFs

Another milestone was reached in the ETF industry Thursday as CSOP FTSE China A50 ETF (NYSE: AFTY) became the first ETF to be listed in the U.S. by a Chinese asset management company.

Similar A-share ETFs have been listed in the U.S. before, but most have been partnerships between U.S. or Europe-based ETF issuers and Chinese asset managers.

CSOP

Chinese asset management company CSOP was founded in 2008 and was the first offshore asset manager set up by a regulated asset management company in China, according to CSOP's website.

China A-shares products are becoming more popular, as an increasing number of U.S. investors are jumping at the opportunity to own physical Chinese A-shares.

Related Link: China Seeks To Break World "Duopoly" On Commercial Aircraft

Competitive Peers

CSOP will be competing with the Deutsche X-Trackers Harvest CSI 300 China A-Shares ETF (NYSE: ASHR), now with more than $1 billion in assets; KraneShares Bosera MSCI China A-Shares ETF (KraneShares Trust) (NYSE: KBA) and the Market Vectors China AMC A-Share ETF (Market Vectors ETF Trust) (NYSE: PEK).

AFTY, however, is not joining the U.S listed A-shares race empty-handed. CSOP's listing took in the largest initial capital investment among all U.S.-listed equity ETFs since 2007. The initial investment totaled $237 million in assets equating to 13.96 million shares.

A Closer Look At AFTY

In terms of the strategy and makeup of the ETF, AFTY comprises 50 of the largest companies in the China A-shares market across nine sectors. Financials make up 68 percent of the portfolio, followed by consumer staples at 5 percent.

The top individual holdings include:

  • Ping An Insurance (OTC: PIAIF) at 9 percent
  • Citic Securities (OTC: CIIHF) making up 6.1 percent
  • China Merchants Bank (OTC: CIHHF) at 5.7 percent

The ETF began trading on March 12 at $17.72 and has an expense ratio of 0.99 percent.

Posted-In: China CSOPSpecialty ETFs New ETFs Emerging Market ETFs Trading Ideas ETFs Best of Benzinga

 

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