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Potential ETF Opportunities in Asia


Investor seeking to diversify a stock portfolio may consider selective exchange traded fund strategies that tap into Asian markets as valuations and growth appear favorable.

On the upcoming webcast, Deciphering Asia: Pinpointing Potential Opportunities, Anson Chow, Vice President of Passive Asset Management for Asia Pacific at Deutsche Asset & Wealth management, Peng Wah Choy, Vice Chairman and CEO of Harvest Global Investments Limited, Michael Jones, Chairman and Chief Investment Officer at RiverFront Investment Group, and Nick Baseel, ETF Regional Vice President at Deutsche Asset & Wealth Management, look at Asian markets, notably China, and provide Asia strategy options that could help diversify an investment portfolio.

For instance, ETF investors can now tap directly into Chinese markets through China A-shares ETFs, including the Deutsche X-trackers Harvest MSCI All China Equity Fund (CN) , Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) , Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (NYSEArca: ASHS) and recently launched Deutsche X-trackers CSI 300 China A-Shares Hedged Equity ETF (ASHX) .

ASHR is the largest U.S-listed A-shares ETF and targets the 300 largest and most liquid stocks in the China A-shares market.

ASHS  which track more mid-sized Chinese A-shares, includes Chinese A-shares taken from the China Securities 500 Index, stocks listed in Shanghai and Shenzhen.

CN has a broader portfolio, including allows investors to track mainland Chinese stocks, with a 45.2% position in ASHR and 16.4% in ASHS, and the fund holds Chinese stocks listed in the U.S. and Hong Kong.

Lastly, the recently launched ASHX tracks the CSI 300 USD Hedged Index, which is designed to provide direct access to China A-shares while diminishing the negative effects of a depreciating Chinese yuan currency against the U.S. dollar – a weaker foreign currency means that returns are also lowered when converted into U.S.-dollar-denominated returns. The ETF basically acts like a hedged version of ASHR. [ 2 New Currency-Hedged China A-Shares ETFs]

China A-shares refer to renminbi-denominated onshore Chinese stocks that are traded on the Shanghai and Shenzhen stock exchange. The A-shares are also limited to foreign investors who have gained regulatory approval to trade the securities.

Traditionally, U.S. investors have been able to gain exposure to China through H-shares, or Chinese companies stocks listed on the Hong Kong exchange.

Under current Chinese regulations, foreign investors may access A-Shares if they are a designated foreign institutional investor or gained access through either the Qualified Foreign Institutional Investor (QFII) or a Renminbi Qualified Foreign Institutional Investor (RQFII) programs.

Financial advisors who are interested in learning more about the Asian markets can register for the Wednesday, November 4 webcast here.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.