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This China ETF Is Closing

ETF Professor

Last week was a rough one for Chinese stocks, as equities in the world's second-largest economy endured their worst week since October.

To top it off, there was news of a coming closure of a U.S.-listed China exchange traded fund.

What Happened

After the close of U.S. markets on April 26, State Street Corp. (NYSE: STT), the third-largest U.S. issuer of ETFs, said it's shuttering the SPDR MSCI China A Shares IMI ETF (NYSE: XINA).

That fund debuted in October 2015 and had just $5.5 million in assets under management as of April 25, according to issuer data.

Why It's Important

News of XINA's closure comes at a time of strength for Chinese equities. Even with a decline of almost 5 percent last week, XINA is still higher by 32.4 percent year-to-date. The fund is being closed ahead of the addition of more A-shares equities to MSCI's international indexes. A-shares are the stocks trading on mainland China.

XINA tracks the MSCI China A International IMI Index, which “seeks to track the MSCI China A International IMI Index, which covers 99% of Chinese A Shares, including large mid and small cap firms,” according to State Street.

The soon to be closed ETF holds 617 stocks.

“The final day for creations will be May 29, 2019,” according to a statement issued by Boston-based State Street. “Trading of all shares will be suspended on the NYSE Arca at the open of market on May 30, 2019, and proceeds of the liquidation are scheduled to be sent to shareholders on or about June 6, 2019.”

What's Next

State Street still offers the $1.56 billion SPDR S&P China ETF (NYSE: GXC), one of the oldest U.S.-listed China ETFs.

As of mid-April, nearly 60 U.S.-listed ETFs have been closed this year. Last year, a record 186 ETFs were closed in the U.S.

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