Add the Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK) to the list of U.S.-listed exchange traded funds that have benefited from the surge in Chinese A-shares.
PEK, the oldest U.S.-listed ETF offering exposure to A-shares, the stocks trading on China’s mainland in Shanghai and Shenzhen, has topped $100 million in assets under management. To be precise, PEK had $126.2 million in assets under management as of April 13, according to Market Vectors data.
PEK, which debuted in October 2010, initially offered investors A-shares exposure via a basket of derivatives contracts. In early 2014, Market Vectors announced it entered into an agreement with China Asset Management, China’s largest mutual fund manager by assets under management, allowing PEK to give investors physical exposure to A-shares. [Market Vectors ETF Moves Toward Physical A-Shares Holdings]
Partnerships, such as the one Market Vectors has with China Asset Management, are critical for foreign ETF issuers being A-shares ETF that holds actual equities. China Asset Management Renminbi Qualified Foreign Institutional Investor (RQFII), which means it meets Chinese regulatory requirements to be a foreign owner of A-shares.
PEK tracks the CSI 300 Index, a modified, free-float cap-weighted index that is home to stocks listed in Shanghai and Shenzhen. That is the same index tracked by the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR).
Over the past year, PEK has nearly doubled, surging 97.5% while the iShares China Large-Cap ETF (NYSEArca: FXI), the largest U.S.-listed China ETF, gained 42.5% over that period. PEK has proven adept at gathering assets as investors have skipped FXI.
For example, PEK has added nearly $8.7 million in new assets this year while FXI has bled $29.6 million. Last year, investors added $44 million to PEK while pulling $424 million from FXI. [U.S. Investors Miss out on China ETF Rally]