Investors are piling back into Chinese equities and country-specific exchange traded funds ahead of the Lunar New Year festivities. Since the Shanghai bourse will be closed during the week-long holiday, China A-shares ETF traders should be prepared for wider premiums and discounts.
More investors are turning to Chinese markets. For instance China-related equity funds attracted $1.62 billion in assets for the week ended February 11, with most of the money funneled into China A-shares ETFs, reports Shuli Ren for Barron’s. [PBOC Easing Could Support China ETFs]
Investors were jumping back in as China’s benchmark stock index capped its first weekly gain in a month in response to Beijing injecting cash back into the system to counter the sudden spike in new IPOs and cash demand ahead of the Chinese New Year holiday, which begins Wednesday, February 18 through Tuesday, February 24.
With the increased interest, China A-shares ETF investors should know what they are getting themselves into. The db X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR) and Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK) both track the CSI 300 Index. The KraneShares Bosera MSCI China A ETF (NYSEArca: KBA) tracks the MSCI China A Index. The PowerShares China A-Share Portfolio (NYSEArca: CHNA) is an actively managed option that utilizes SGX FTSE China A50 Index futures contracts. [A-Shares ETFs not Lacking for Fans]
Through the QFII system, foreign investors are able to access Chinese A-shares, which trade on the Shanghai Stock Exchange and the Shenzen Stock Exchange and are typically only available to mainland citizens. A-shares are also only quoted in the Chinese renminbi currency. [Another Creation Limit for an A-Shares ETF]