Exchange traded funds (ETFs) offer investors the opportunity to gain access to China’s rapidly growing economy, but the country has kept its A-shares marketplace closed off to U.S. investors. Until now.
Van Eck Global has filed with the Securities and Exchange Commission (SEC) to launch 11 new ETFs that will hold A-shares from the Shenzen and Shanghai stock exchanges, as compared to other China ETF options that trade in Hong Kong (H-shares) or B-shares, reports Murray Coleman for Barron’s. The suite of ETFs will include an all-cap China fund, a small-cap fund and nine sector-related ETFs.
The 11 new funds will be in addition to last week’s launch of the first U.S. ETF with exposure to China’s A-Shares, the Market Vectors China (NYSEArca: PEK). [First China A-Shares ETF Launches.]
A-shares are issued by companies that have been incorporated in the mainland of China, which trade on the Chinese stock markets, according to China Stock Digest. These A-shares have experienced high growth as a result of the slow removal of restrictions placed on the A-shares for foreign investors and a steadily expanding Chinese economy.
Chinese companies offer A-shares and B-shares, and the only difference between the two is that A-shares are denominated in the Chinese renminbi, whereas B-shares are quoted in foreign currencies. Before the Van Eck’s entry into this market, A-shares were only available to institutional investors and residents.
For more information on China, visit our China category.
Max Chen contributed to this article.
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.