There has been a good amount of coverage in terms of China’s particularly strong equity market in the past quarter or so, with benchmark ETF FXI (iShares FTSE China Large Cap, Expense Ratio 0.73%) within shouting distance of a fresh 52 week high ($41.30, ETF is trading $40.84 currently), and today we devote some time to China based Bond ETFs.
This is still a rather immature segment of the ETF market at the moment, judging by the lack of depth of product offerings in the space at the moment, but then again we are not certain that anyone forecasted the China Equity ETF category having twenty three product offerings as of 2014, so there is clear room for growth and investor interest in this region.
On the China Bond front, DSUM (PowerShares Chinese Yuan Dim Bond Portfolio, Expense Ratio 0.45%) launched in 2011 and has received modest attention since then, attracting about $176 million in assets under management.
The fund has barely missed a beat lately and recent U.S. Dollar strength certainly does not hurt, as DSUM has largely continued its trend of trotting higher, today trading at a new recent high and challenging its early 2014 highs.
Year to date, DSUM has pulled in about $29 million and we see the institutional holders list growing and diversifying in recent quarters among larger financial institutions. DSUM is also classified in the greater “Emerging Markets Bonds” category, where it is actually now the seventh largest fund, behind well-known names such as EMB (iShares JP Morgan USD Emerging Markets Bond, Expense Ratio 0.60%) and PCY (PowerShares Emerging Markets Sovereign Debt Portfolio, Expense Ratio 0.50%) to name the largest in this segment.