The Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR) has an enviable problem: The exchange traded fund is so popular that Deutsche Asset & Wealth Management (DAWM) is again having to limit creations in the fund.
“Effective trade date January 21, 2015, ASHR will accept one creation unit, comprised of 50,000 shares, each day,” said DAWM in a statement issued Monday.
That marks the third time since September that DAWM has limited creations in ASHR, the largest U.S.-listed A-shares ETF, because strong investor demand for the fund was forcing it to to bump up against their respective Renminbi Qualified Foreign Institutional Investor (RQFII), which allows the funds to purchase A-shares equities.
However, it should be noted DAWM and ASHR’s sub-advisor, Harvest Global Investments Limited, have been quick to land larger RQFII quotas to get ASHR’s larger creation limits. For example, DAWM announced on Nov. 13 that ASHR’s creations would be limited to one 50,000-share unit per day, but by Dec. 2, that limit was raised to five units per day. [Creation Limit Boosted for A-Shares ETF]
A similar creation for ASHR was imposed in September, but by mid-October DAWM and Harvest landed an expanded RQFII quota. [Deutsche Raises Creation Limit for A-Shares ETF]
In September, ASHR’s RQFII quota was raised to 3.86 billion renminbi from 3.25 billion renminbi. The ETF’s current RQFII quota is 4.48 billion renminbi, according to issuer data.
“While there can be no assurance that such an increase will be granted or that any increase will be sufficient to meet investor demand, this interim creation limit is expected to be temporary,” said DAWM in the statement. “When such an increase, if any, is granted, or sufficient redemptions in ASHR allow, ASHR will resume accepting creation units as usual.”