Lastly, the recently launched ASHX tracks the CSI 300 USD Hedged Index, which is designed to provide direct access to China A-shares while diminishing the negative effects of a depreciating Chinese yuan currency against the U.S. dollar – a weaker foreign currency means that returns are also lowered when converted into U.S.-dollar-denominated returns. The ETF basically acts like a hedged version of ASHR. [2 New Currency-Hedged China A-Shares ETFs]
China A-shares refer to renminbi-denominated onshore Chinese stocks that are traded on the Shanghai and Shenzhen stock exchange. The A-shares are also limited to foreign investors who have gained regulatory approval to trade the securities.
Traditionally, U.S. investors have been able to gain exposure to China through H-shares, or Chinese companies stocks listed on the Hong Kong exchange.
Under current Chinese regulations, foreign investors may access A-Shares if they are a designated foreign institutional investor or gained access through either the Qualified Foreign Institutional Investor (QFII) or a Renminbi Qualified Foreign Institutional Investor (RQFII) programs.
Financial advisors who are interested in learning more about the Asian markets can register for the Wednesday, November 4 webcast here.