Problem Solved: Deutsche Boosts Creation Limit for A-Shares ETFs

Deutsche Asset & Wealth Management, the exchange traded funds unit of German banking giant Deutsche Bank (NYSE: DB), said today that effective immediately, increased creation limits are in place for the Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR) and the Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (NYSEArca: ASHS).

Last month, DAWM limited creations in ASHR and ASHS because investor demand for those ETFs, ASHR in particular, was forcing the funds to bump up against their respective Renminbi Qualified Foreign Institutional Investor (RQFII), which allows the funds to purchase A-shares equities. [Strong Demand Forces Limited Creations in A-Shares ETFs]

At the time of that announcement, DAWM said it would “accept one creation unit, comprised of 50,000 shares, each day per fund.”

“ASHR will open to ten creations units each day, and ASHS will open to five creation units each day,” DAWM said in a statement released Monday.

Deutsche and Harvest Global Investments, China’s second-largest asset manager and the sub-advisor on ASHR and ASHS, had been working with “Chinese authorities to obtain an increase in RQFII quota to keep in-line with investor demand,” according to a statement issued by DAWM last month. [A Dilemma for A-Shares ETFs]

Investor interest in A-shares has been strong enough over the past year that Deutsche was able to trim ASHR’s expense ratio to 0.82% per year soon after the ETF’s November 2013 launch. The German banking giant has also indicated it could expand its lineup of A-shares ETFs to include sector funds.