More exchange traded funds issuers are looking to bring to market ETFs that offer investors exposure to the hard-to-access China A-shares market.
Deutsche Bank’s db X-trackers Harvest 300 CSI China A-Shares Fund (NYSEArca: ASHR) debuted today, marking the arrival of the first U.S.-listed ETF offering investors to actual Chinese A-shares, not derivatives as previous A-shares funds have. [Deutsche Offers New Twist on China A-Shares ETFs]
ASHR may not be alone for long because KraneShares, which already sponsors two China ETFs, says it is close to launching the KraneShares Bosera MSCI China A ETF. Should that fund come to market, it will trade on the New York Stock Exchange under the ticker “KBA,” according to a statement from KraneShares.
KraneShares said it is now accepting indications of interest for KBA, that the ETF’s prospectus is effective and that the ETF “will soon launch.” The issuer added it is the first U.S.-owned company partnered with a Chinese asset manager, Bosera Asset Management, to receive an investment quota from a Chinese regulatory agency for a Renminbi Qualified Foreign Institutional Investor (RQFII) ETF in the U.S.
Bosera has $32 billion in assets under management, according to the KraneShares statement.
KBA will track the MSCI China A Index, which had 464 constituents with an average market value of $1.8 billion at the end of the third quarter, according to MSCI data.
Nine of the top-10 holdings in the index are financial services firms and that sector accounts for over a third of the index’s weight. Industrials and consumer discretionary names also receive double-digit allocations in MSCI China A Index.
The index had a dividend yield of 2.19% and traded at 10 times forward earnings with a price-to-book ratio of 1.75 at the end of September, according to MSCI data.
KraneShares said it plans to conduct an institutional roadshow to highlight key traits of the new ETF. The firm also sponsors the KraneShares CSI China Internet ETF (NasdaqGS: KWEB) and the KraneShares CSI China Five Year Plan ETF (NYSEArca: KFYP). [A Look at the New KraneShares ETFs]