Van Eck Global has introduced a China ETF to go along with its growing investment menu of emerging markets funds.
The New York, NY-based investment firm debuted the Market Vectors China ETF (NYSE: PEK) which proposes to track A-shares.
Chinese equities are generally divided into three groups: A-shares, H-shares and Red Chips. Many publicly traded
Chinese companies have simultaneous listings of these share classes on the Hong Kong exchange along with China’s two mainland stock markets.
A-shares can only be bought or sold by Chinese citizens and they are listed on either the Shanghai or Shenzhen stock exchange. Some companies offer both A-share listings along with H-shares.
The fund does not invest in China A-shares directly but rather uses swaps and derivatives that closely shadow them.
H-shares are offered by companies incorporated in China and are listed on the Hong Kong Stock Exchange or another foreign exchange. They are governed by Chinese law and their shares trade in Hong Kong dollars.
PEK’s underlying index is the CSI 300 which consists of 300 A-share stocks listed on the Shenzen or the Shanghai Stock Exchanges. China Securities Index Co. is the index provider and PEK follows a free-float market capitalization weighted strategy.
The average market size of stocks within PEK is $2.3 billion and the top three industry sectors are financials, industrials and materials.
PEK’s net expense ratio is 0.72% and the fund began trading on October 13th.
In other ETF news, BlackRock has changed both the name and ticker symbol for the iShares S&P North American Technology-Semiconductors ETF (NYSE: IGW). As of October 15th, the fund is now known as the iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ: SOXX).
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