The concept of investing in China “A-Shares” which are securities that trade on the Shanghai and Shenzen Stock Exchanges and are denominated in renminbi (yuan) debuted in ETF form via PEK (Market Vectors China ETF, Expense Ratio 0.72%) about three years ago in October of 2010.
The underlying index tracks three hundred listed “A-Shares” stocks but the ETF itself is a bit more complicated than that in that it invests in swaps that track the China A-shares market. A-Shares as opposed to B, N, and H Shares that are typically linked to China have historically carried heavy restrictions, instituted by the Chinese government in regards to their investment by foreigners, but these restraints have been loosened up in recent years.
PEK still remains small even as it celebrates its three year birthday in terms of live ETF performance with only $34.3 million in assets under management while averaging about 7,600 shares traded daily but at least one other issuer sees investment potential in the Chinese A-Shares market.
PowerShares recently launched the identifiable CHNA (PowerShares China A-Share Portfolio, Expense Ratio 0.50%) earlier this month, and with very limited trading history thus far, the fund is clearly still in its early stages in terms of asset raising and regular trading volume.
Market Vectors China ETF