Direxion Investments has launched the first inverse exchange-traded fund (ETF) in the US tied to China A-shares – The Daily CSI 300 China A Share Bear 1X Shares (:CHAD).
The new ETF seeks daily investment results, before fees and expenses, of 100 per cent of the inverse performance of the CSI 300 Index, which consists of 300 market-capitalisation-weighted China A-share stocks.
"China A-shares have become very popular with U.S. investors and traders because they recently became accessible through ETFs," says Brian Jacobs, President of Direxion Investments. "But there are those who may want to hedge China A-share exposure, and this new ETF offers a way for traders with a contrarian view of this asset category to seek protection or profit."
China A-shares, which trade on the Shanghai and Shenzhen Stock Exchanges, account for roughly two-thirds of the market capitalisation of Chinese stocks. Since most foreign investors cannot purchase China A-shares, investors in most existing China ETFs lack exposure to the majority of Chinese companies.
However, with the launch of CHAD, Direxion now offers the only 2X leveraged and -1X inverse ETFs in this asset category. Direxion launched the Daily CSI 300 China A Share Bull 2X Shares (Ticker: CHAU) in April 2015.
Like all leveraged ETFs, this Fund is intended only for traders with an in-depth understanding of the risks associated with seeking leveraged investment results, and who plan to actively monitor and manage their positions. There is no guarantee that the Fund will meet its objective.