China ETFs Could Strengthen as FTSE Russell Set A-Shares Inclusion

FTSE Russell will begin incorporating China A-shares from June 2019 over three separate tranches through March 2020. China A-shares inclusion will be calculated using 25% of investable market capitalization of the eligible large-, mid- and small-cap securities from the FTSE China A Stock Connect All Cap Index.

In the first phase, China A-shares are expected to make up 5.5% of the total FTSE Emerging Index. For the FTSE Global All Cap Index, China A-shares are expected to make up 0.57%.

As the demand for Chinese mainland stocks rises, the move for broader inclusion could be beneficial to an array of exchange traded funds that cover the Chinese A-shares market, including the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: PEK), VanEck Vectors ChinaAMC CSI 300 ETF (NYSEArca: CNXT), iShares MSCI China A ETF (BATS: CNYA) and db Xtrackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR). These ETFs track China-listed company stocks on the Shanghai and Shenzhen Stock Exchanges.

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