PowerShares, the fourth-largest U.S. ETF sponsor, is set to launch an actively managed exchange traded fund backed by Chinese A-Shares, which allows investors to gain exposure to China-listed companies.
The actively managed PowerShares China A-Share Portfolio (NYSEArca: CHNA) will begin trading Thursday, Oct. 10, according to ETF Daily News.
Through the qualified foreign institutional investor system, foreign investors are able to access Chinese A-shares, which trade on the Shanghai Stock Exchange and the Shenzen Stock Exchange and are typically only available to mainland citizens. A-shares are also only quoted in the Chinese renminbi currency. [Exposure to China Through Restricted A-Shares ETF]
Since mainland China’s A-Shares listed in Shanghai and Shenzhen are not accessible to most foreign investors, people typically gain exposure to Chinese equities through China index funds and ETFs that hold Chinese companies listed in Hong Kong or New York.
CHNA, though, will not be able to track China A-Shares off the bat as the fund advisor works with Chinese authorities to receive a QFII license.