Daily ETF Watch: Small-Cap China Coming

DB is hoping a small-cap China A-share ETF can be as big a hit as ASHR.

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Reviewed by: Hung Tran
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Edited by: Hung Tran

DB is hoping a small-cap China A-share ETF can be as big a hit as ASHR.

Deutsche Bank has updated paperwork for its proposed db X-trackers Harvest China A-Shares Small Cap Fund (ASHS) to include fees for the offering, signaling that the fund is likely to soon launch.

The proposed small-cap ETF is a riff on its successful db X-trackers Harvest CSI 300 China A-Shares Fund (ASHR), a first-to-market ETF that holds much-coveted physical shares of mainland securities. DB is hoping ASHS will have as much success as its predecessor, which now has $146 million since inception last November.

However, the proposed offering comes at a time when the Chinese economic juggernaut is perceived to be slowing, and officials are signaling that further stimulus may be in order to jump-start the world’s second largest economy.

ASHS will track the CSI 500 Index, which is composed of the 500 smallest and most liquid stocks in the China A-share market. The fund will have an annual expense ratio of 0.80 percent, or $80 for every $10,000 invested, according to a regulatory filing.

Launches

Direxion on Thursday, April 10 plans to launch two futures-based inverse and leverage gold ETFs, promising returns of 300 percent of its benchmark, according to an electronic communique from NYSE Arca.

The funds, the Direxion Daily Gold Bull 3X Shares and Direxion Daily Gold Bear 3X Shares, will launch at a time when gold is rallying, as investors seek safe haven from geopolitical risks from tensions between Russia and Ukraine.

“Gold is seeing a bit of fresh safe-haven demand due to the increase in Russia-Ukraine tensions,” Jim Wyckoff, a senior analyst at Kitco Metals, reports Hard Asset Investor. "It's not likely this matter will fade away, and it's more likely that it will escalate in the coming weeks," which would be bullish for the gold market, he said.

Associated fees for the funds were not made available by the firm.

Fee Drop

The annual expense ratio on the $20.7 billion Vanguard FTSE Developed Markets ETF (VEA | A-90) dropped 10 percent to 9 basis points from 10 basis points previously. That means VEA now costs $9 for every $10,000 invested, according to a statement from the firm.

VEA’s expense ratio decline, a function of growing assets in the fund’s previous fiscal year, brings it in line with its smaller competitor, the $2.1 billion Schwab International Equity ETF (SCHF | A-96). The Schwab fund also has an annual expense ratio of 9 basis points.

The shifting prices is a small sample of the ongoing fee war between ETF issuers, which, in the case of VEA and SCHF, also involves the iShares Core MSCI EAFE ETF (IEFA | A-93). IEFA has an annual expense ratio of 14 basis points—more than the other two to be sure, but not significantly so.

 

Hung Tran is a former staff writer for etf.com.