Market Vectors ChinaAMC A-Share ETF (PEK) will release its capital gains tax (CGT) reserve back to PEK as of market close on 26 June 2014.
The reserve’s release will add USD0.07872 per share to PEK’s net asset value.
Effective on 26 June at market close, PEK will no longer reserve 10 per cent of its realised and unrealised gains from its A-Shares investments to meet any potential withholding tax liability that may be imposed by the People’s Republic of China, except with respect to realised and unrealised gains from PEK’s investments in A-Shares of land-rich enterprises, which are companies that have greater than 50 per cent of their assets in land or real properties in China.
If China’s government begins applying rules regarding taxation of income from A-Shares investments to Renminbi Qualified Foreign Institutional Investors and/or begins collecting capital gains taxes on such investments, PEK could be subject to withholding tax liability. The impact of any such tax liability on PEK’s return could be material.
PEK seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the CSI 300 Index. The index consists of 300 A-Share stocks listed on the Shenzen or Shanghai Stock Exchange.