China Post Global has launched the Market Access STOXX China A Minimum Variance Index UCITS ETF, saying it is the first smart beta ETF on China to launch in Europe.
The ETF implements a minimum variance approach to China’s onshore stock market. The fund will track the performance of the STOXX China A 900 Minimum Variance Unconstrained AM index which selects and weights stocks listed on the Shanghai and Shenzhen stock exchanges based on their volatility and how heavily they are traded on exchange.
The ETF uses full physical replication and has a total expense ratio (TER) of 0.65 per cent. With its targeted smart beta strategy, it’s intended as a cost-effective alternative to actively-managed funds.
The Market Access STOXX China A Minimum Variance Index UCITS ETF will be listed on the London Stock Exchange, SIX Swiss Exchange, Deutsche Börse and China Europe International Exchange, and registered in the UK, Austria, Germany, Italy, Luxembourg, Netherlands and Switzerland.
Danny Dolan, Managing Director at China Post Global, says: “China has for some time been the primary engine of global growth and there is significant investor demand for China exposure, though in many cases allocations are being held back by concerns about higher volatility. The minimum variance approach works to address these volatility concerns while maintaining sufficient liquidity, aiming to give investors access to higher risk-adjusted returns in the medium- and long term.”