Exchange traded funds (ETFs) are oft-lauded for giving investors exposure to sectors and asset classes that were previously cut off to them. Van Eck‘s launch of the industry’s first China A-Shares ETF continues that trend.
Market Vectors China (NYSEArca: PEK) gives exposure to the China A-share market by using swaps and derivatives while also tracking the CSI 300 Index, an index made up solely of A-shares, reports Cinthia Murphy for Index Universe.
A-shares are stock from mainland companies in China. They’re highly regulated by the government and until now were off-limits to foreign investors. Financial reform aimed at encouraging more foreign investment in the country is responsible for making A-shares available. [Will China Let Yuan ETFs Loose?]
ETFs that track China are in demand this year as the economy grows. However, the country’s leaders have been looking for ways to cool the growth somewhat before it gets out of control. Their moves may be working: economists estimate that China’s growth will cool to 8.9% in 2011, a slowdown from the anticipated 10% growth this year. [Chindia: Two Economies, One ETF.]
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.