Either an exchange traded fund offers physical access to China’s high-flying A-shares stocks or it does not. The one ETF that is an “almost A-shares” fund, a status that helps explain its recent bullishness, is the new Deutsche X-trackers Harvest MSCI All China Equity Fund (NYSEArca: CN).
CN does not offer pure A-shares exposure on par with its stablemates, 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). However, ASHR, the largest U.S.-listed A-shares ETF, and ASHS combine for 56.3% of CN’s, according to Deutsche Asset & Wealth Management data.
ASHR and ASHS are up 30.3% and 5.9%, respectively, over the past month, performances that have translated to a 15.3% gain for CN over the same period. CN hit an all-time last Friday. However, that does not highlight all of CN’s advantages. [Fine Start for a China ETF]
With that large combined weight to ASHR and ASHS, CN stands as a credible alternative for accessing those ETFs at a time when unprecedented demand for those funds has forced Deutsche Asset & Wealth Management to limit creations in those funds twice since September. Last week, DAWM announced that limit has been raised for ASHR, but a creation limit of just one 50,000-share unit per day remains in place for ASHS. [Creation Limit Raised for A-Shares ETF]
Traditional complaints about China ETFs have included those about too few stocks, excessive exposure to financial services companies and state-controlled enterprises, not enough weight to tech and Internet stocks, too much exposure to Internet names and not enough access to A-shares.