The Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR) surged 4.1% last month, bringing its year-to-date to more than 20% and it appears as though the largest exchange traded fund dedicated to China A-shares can keep moving higher.
A-shares are the Chinese stocks trading on mainland exchanges in Shanghai and Shenzhen. In June, MSCI Inc. said it will include China A shares in the MSCI Emerging Markets Index and the MSCI ACWI Index beginning in June 2018.
That announcement has broad support from international institutional investors with whom MSCI consulted, primarily as a result of the positive impact on the accessibility of the China A market of both the Stock Connect program and the loosening by the local Chinese stock exchanges of pre-approval requirements that can restrict the creation of index-linked investment vehicles globally.
Importantly, ASHR’s technical outlook could be pointing to more upside ahead for the ETF even though options trading in the ETF remains sluggish.