Global X Launches China Biotech Innovation ETF (CHB) | ETF Trends

Global X ETFs added to its family of thematic growth ETFs today, launching a new ETF on Nasdaq that will invest in leading China-based companies in the country’s emerging field of biotechnology.

The Global X China Biotech Innovation ETF (CHB) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive China Biotech Innovation Index.

Regulatory easements and support from the Chinese government have helped propel China’s biotech industry to become the world’s second largest. Biotechnology is specifically named as a Strategic Emerging Industry and prioritized by Beijing’s Made in China 2025 and 13th Five Year Plan initiatives.1 Following a 2018 rule change at the Hong Kong Stock Exchange, which helps attract Chinese biotech firms, 17 mainland Chinese biotech firms raised $5.12 billion through IPOs in Hong Kong.2

Despite its recent growth, the industry may soon reach a key inflection point, as substantial research and development efforts begin to yield greater commercial results. China’s biotech industry is estimated to be just one-tenth the size of the United States’, but the number of annual biotechnology patents granted in China now exceeds the number in the United States. And biotech research publications from academia have grown in the country by an average of 20% per year.3

“Biotech has the potential to truly transform healthcare, by potentially unlocking treatments to previously incurable diseases and offering improvements to our general health,” said Chelsea Rodstrom, research analyst at Global X ETFs. “Leveraging our experience in thematic investments, as well as our expertise on Chinese markets, we believe that CHB accesses a key segment of the market and are excited to watch this space continue to grow.”

The fund will track the Solactive China Biotech Innovation Index, which includes biotech companies headquartered in Hong Kong or China. Firms eligible for inclusion include US-listed ADRs, Hong Kong-listed securities, and China A-shares available on the Stock Connect platform.

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