The PowerShares China A-Share Portfolio (CHNA) will enable investors to increase exposure to China-listed companies.
The new ETF, through its qualified foreign institutional investor system, will enable foreign investors to access Chinese A-shares, which will trade on the Shanghai Stock Exchange and the Shenzen Stock Exchange.
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The actively managed ETF, with a management fee of 0.50%, will seek long-term capital appreciation by offering exposure to the China A-Shares market using a quantitative, rules-based investment strategy.
The new ETF will invest in a combination of futures contracts on the FTSE China A50 Index and targets to gain direct access to Chinese A-Shares.
CHNA will not be able to track China A-Shares off the bat as the fund advisor is working with Chinese authorities to receive a QFII license.
Lorraine Wang, Invesco PowerShares global head of ETF products and research, said: "U.S. investors currently have very limited access to China’s domestic A-Shares market, which embodies the amazing growth story of the world’s second largest economy by GDP. The PowerShares China A-Share Portfolio (CHNA) is designed to provide a liquid, efficient and cost effective alternative to direct investments in China A-Shares."
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By GlobalDataMichael Syn of the Singapore Exchange (SGX), said: "The SGX FTSE China A50 Index Futures is the only offshore futures on the China A-Shares market without Qualified Financial Institutional Investor (QFII) requirements, and is the most liquid offshore exchange-traded vehicle providing exposure to China A-Shares market."
