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Lower Fees For A Pair Of China ETFs

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Lower Fees For A Pair Of China ETFs
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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 (NYSE: 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 (NYSE: 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 (NYSE: 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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