DWS Gives China ETF a Makeover to Access MSCI Inclusion

To help investors capitalize on the MSCI’s index changes to its China allocations, DWS has revamped one of its China ETFs to track the new indexing changes that now includes mainland A-shares.

On Monday, DWS announced that the Xtrackers CSI 300 China A-Shares Hedged Equity ETF (NYSEArca: ASHX) will now be changed to the Xtrackers MSCI China A Inclusion Equity ETF (NYSEArca: ASHX) and will switch its underlying index to the MSCI China A Inclusion Index. ASHX’s expense ratio is also lowered to 0.60% from a net 0.70%.

Related: Why You Should Incorporate China ETF Exposure

The Xtrackers MSCI China A Inclusion Equity ETF’s new underlying index is designed to track the progressive partial inclusion of A shares in the MSCI Emerging Markets Index over time. A shares Chinese stocks listed in Shanghai and Shenzhen. Shanghai’s stock exchange has a market cap of 32 trillion yuan, or $5 trillion, and Shenzhen’s exchange has a market cap of 22 trillion yuan, or $3.5 trillion.

Fine Tune China Exposure

“China is the world’s second largest economy and its equity market has become increasingly accessible for international investors,” Fiona Bassett, Global Co-Head of Passive Asset Management, said in a note. “We are always looking for ways to provide clients access to new markets. DWS was the first to offer ETF clients an investment opportunity to onshore China through our Xtrackers Harvest CSI 300 China A-Shares ETF. Now, with the changed underlying index for ASHX, investors will be able to fine-tune their exposure to Chinese capital markets as MSCI works to introduce more A shares into their Global Standard Indices.”

Investors can also expect MSCI to gradually add more mainland Chinese A shares to its indices. MSCI said further inclusion will be based on Beijing’s moves to deregulate markets, which include allowing foreigners more accessibility, making continued progress on trading suspensions, and further loosening restrictions on the creation of index-linked investment vehicles, Reuters reported.

Furthermore, DWS is also lowering the fees on the Xtrackers MSCI All China Equity ETF (NYSEArca: CN) to 0.50% from 0.62% as well.

For more information on new fund products, visit our new ETFs category.