FaithShares’ phoenix looks to China for its ETF debut.
Exchange Traded Concepts, a new Oklahoma City-based firm founded by Garrett Stevens, the man behind the now-defunct FaithShares, has filed paperwork with U.S. regulators to market its first round of ETFs. The funds will focus on various slices of the consumer-linked China space.
The company will use FaithShares’ exemptive relief to bring its planned ETFs to market. Krane Funds Adviser is a partner in the offering.
Sector-specific ETFs focused on China aren’t new. Companies like Global X Funds and Guggenheim have China-sector ETFs in the market, and New York-based Van Eck has a lineup of 11 China sector ETFs in registration.
Exchange Traded Concepts’ proposed funds carry a heavy focus on consumer-related sectors and introduce new concepts like an urbanization ETF and a China Five Year Plan ETF.
The funds include:
- KraneShares China Consumer Luxury ETF will replicate the Dow Jones China Consumer Luxury Index. It will invest in companies that provide high-end consumer goods and services, from apparel to hotels. The index includes companies that generate “a sizable portion of their sales” in China.
- KraneShares China Alternative Energy ETF will track the Dow Jones Alternative Energy Index and include companies related to alternative energy sources such as solar power and wind, as well as the manufacture and production of electric cars, their components and clean technologies.
- KraneShares China Internet ETF will replicate the CSI Overseas China Internet Index. The fund will invest in China-based Internet companies involved with software and services, Internet retail and entertainment software.
- KraneShares China Consumer Staples ETF will track the CSI Overseas China Consumer Staples Index, which comprises China-based companies in food and staples retail, beverage and tobacco products, or other various household and personal products.
- KraneShares China Consumer Discretionary ETF will track consumer discretionary stocks with a focus on cars and parts, consumer durables and apparel, consumer services, media and retail.
- KraneShares China Urbanization ETF will track the CSI Overseas China Urbanization Index and invest in companies involved with raw materials, property and real estate, industrial names, information technology/hardware and retail.
- KraneShares China Five Year Plan ETF will also track a CSI benchmark, described below.
A Five-Year Plan Fund
Perhaps the most interesting fund in the filing, the final fund will consist of China-based companies that are deemed important in the Chinese government’s Five Year Plan. That plan covers a series of development initiatives the government sponsors in five-year increments for social and economic growth as well as industrial planning.
“The most recently released Plan (2011-2015) has proposed a focus on several areas including, but not limited to, increasing domestic consumption, modernizing agriculture through mechanization and improvement of agricultural service businesses, encouraging stable urbanization, promoting energy saving and environmental protection, and encouraging domestic technological innovation,” the filing said.
The strategy means the fund will be sector-diverse and some of its holdings could overlap with other China sector ETFs.
The company did not disclose tickers or fees for any of the funds in the filing.