Van Eck gets serious about China with plans for a lineup of sector funds.
Van Eck Global Advisors has filed with the Securities and Exchange Commission for permission to launch a slew of ETFs focused in part on elusive A-shares that would provide U.S. ETF investors with sector exposure to China’s rapidly growing economy.
The filing comes a day after the New York-based firm launched the broad-based Market Vectors China ETF (NYSEArca: PEK), an A-shares fund that pioneers a strategy that has been largely off limits to U.S. investors until now. PEK will initially use derivatives before it receives qualified foreign institutional investor status.
China, with its historically retrograde securities markets and unyielding foreign-investor rules, has been a tough nut to crack for Western investors. Van Eck’s PEK is the first A-Shares fund available to U.S. investors, and the proposed funds, if launched, would be the first China sector funds partly utilizing Chinese A-shares.
All of the proposed funds will track indexes composed of China A-shares, China B-shares, China H-shares and shares of companies with controlling Chinese shareholders incorporated outside mainland China and listed on the Hong Kong Stock Exchange.
Van Eck’s proposed new funds are:
- Market Vectors All China All-Cap ETF
- Market Vectors All China Consumer Discretionary Sector ETF
- Market Vectors All China Consumer Staples Sector ETF
- Market Vectors All China Energy Sector ETF
- Market Vectors All China Financial Services Sector ETF
- Market Vectors All China Healthcare ETF
- Market Vectors All China Industrials Sector ETF
- Market Vectors All China Information Technology Sector ETF
- Market Vectors All China Materials Sector ETF
- Market Vectors All China Utilities Sector ETF
- Market Vectors All China Small Cap ETF
“As China's local A-Share market has historically been restricted to the country's domestic investors and Qualified Foreign Institutional Investors, many Emerging Market and BRIC funds are not able to include the A-Share market in their country weighting schemes, leading to a fundamental underweighting of China's true equity market in these funds,” said Van Eck in a press release.
Chinese A-shares are shares of Chinese companies that are traded on the Shanghai and Shenzhen exchanges and that are denominated in the renminbi, the Chinese currency.
Van Eck didn’t specify ticker symbols or expense ratios for its proposed funds.