Invesco has launched a China all-share ETF that only includes A-Shares if they have a stock connect listing.
The Invesco MSCI China All Shares Stock Connect UCITS ETF (MCHN) is listed on the London Stock Exchange (LSE) with a total expense ratio (TER) of 0.35%.
MCHN tracks the MSCI China All Shares Stock Connect Select index which currently offers exposure to 697 Chinese companies listed in Hong Kong, Shanghai, Shenzhen and outside of China.
This includes B-Shares, H-Shares, Red-chips, P-chips, stock connect eligible A-Shares and foreign listings such as American depositary receipts (ADRs).
Some 40.4% of companies in the index are currently listed in China while 37.5% are in Hong Kong and 22.1% are in the US.
The index includes A-Shares if they are under the Shanghai or Shenzhen stock connect programmes and are an existing constituent of the MSCI China All Shares index or if the company’s full market capitalisation and the security float market capitalization meet the cut-off requirements.
Commenting on the launch, Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said: “Despite China being one of the largest and fastest-growing economies in the world, its capital markets have always been difficult for international investors to access.
“There are many different types of share classes, some listed onshore and others offshore, and not all are available to everyone. The index provides exposure to the broad opportunity set."
Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, added: “The Stock Connect programme went a long way to provide foreign investors access to the equities listed on China’s two largest stock exchanges.
"These companies have the greatest exposure to domestic growth, which we think could be attractive given urbanisation, a rising middle class and other demographic trends.
"By tracking this new index, MCHN provides full weight of these important stocks along with global growth opportunities from Chinese stocks listed offshore."
The launch comes a day after the firm unveiled a global clean energy ETF, the Invesco Global Clean Energy UCITS ETF (GCLE), that tracks the WilderHill New Energy Global Innovation index, ETF Stream revealed.