DWS bucks trend with launch of Chinese mid-cap ETF

DWS has rolled out a synthetic exchange traded fund investing in Chinese mid-cap stocks.

The Xtrackers CSI500 Swap Ucits ETF uses indirect replication to track the CSI 500 Net Total Return index, which consists of the 500 predominantly medium and small-cap companies trading on the Shanghai Stock Exchange or Shenzhen Stock Exchange.

Launched at the end of July, the ETF has a total expense ratio of 0.35 per cent and has been registered for sale across much of Europe, including France, Germany and Italy.

The ETF launch comes after several asset managers either shut their China-focused funds or announced plans to close such vehicles after they struggled to attract sufficient investor interest.

This article was previously published by Ignites Europe, a title owned by the FT Group.

It emerged last month that US-based ETF provider Global X ETFs is to close three Ireland-domiciled Chinese equity ETFs at the end of this month.

State Street Global Advisors last month delisted its Ireland-domiciled SPDR Bloomberg China Treasury Bond Ucits ETF from the London Stock Exchange due to a lack of demand, while US-headquartered Krane Funds Advisors shut two Ireland-domiciled China ETFs in May.

Barings closed its China A-share fund in May after investor demand slumped.

In March, Invesco shut a quantitative fund investing in mainland Chinese equities, due to its failure to gather sufficient assets.

China equity funds domiciled in Europe suffered net outflows of €3.9bn in the first four months of 2024, according to Morningstar data.

DWS last week rolled out an emerging market ex-China equity ETF amid rising demand for such products as investors look to reduce their exposure to China.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.