Lower Fees For A Pair Of China ETFs

DWS, a major asset manager and issuer of exchange-traded funds, said it's lowering fees on two of its China ETFs and giving one of those funds a new investment objective.

The Xtrackers CSI 300 China A-Shares Hedged Equity ETF ASHX is the ETF that's getting a new investment objective.

What Happened

ASHX debuted in 2015 as the currency hedged answer to the popular Xtrackers Harvest CSI 300 China A-Shares ETF ASHR, one of the largest U.S.-listed ETFs tracking China A-shares.

ASHX is dropping the currency hedge. The ETF will now track the MSCI China A Inclusion Index.

“The new index is designed to track the progressive partial inclusion of A shares in the MSCI Emerging Markets Index over time,” according to a statement from DWS.

Index provider MSCI started adding China A-shares to its international benchmarks on June 1.

Why It's Important

DWS also said it's lowering the annual expense ratio on ASHX to 0.60 percent per year, or $60 on a $10,000 investment, from 0.70 percent. That fee cut makes ASHX one of the least expensive A-shares ETFs trading in the U.S.

DWS is also lowering the fee on the Xtrackers MSCI All China Equity ETF CN. CN's new annual fee is 0.50 percent, down from 0.62 percent. That ETF, which debuted over four years ago, provides access to hina A-shares, B-shares, H-shares, Red-chips, and P-chips. CN's largest holding is the aforementioned ASHR.

What's Next

“DWS was the first to offer ETF clients an investment opportunity to onshore China through our Xtrackers Harvest CSI 300 China A-Shares ETF,” said Fiona Bassett, DWSGlobal Co-Head of Passive Asset Management, in the statement. “Now, with the changed underlying index for ASHX, investors will be able to fine-tune their exposure to Chinese capital markets as MSCI works to introduce more A shares into their Global Standard Indices.”

The MSCI China A Inclusion Index allocates nearly 34 percent of its weight to financial services stocks and over 13 percent to industrials.

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