Deutsche launches first small cap RQFII ETF

23 May 2014   Category: News, Asia, China, Global   By Daniel Shane

Deutsche Asset & Wealth Management (DeAWM), the asset management arm of Deutsche Bank Group, this week launched the first small cap RQFII ETF, offering investors exposure to CSI 500 A-shares.

The db X-trackers Harvest CSI 500 China A-shares Small Cap Fund is listed on the NYSE Arca and will track the performance of small cap equities in Shanghai and Shenzhen.

The ETF, which has been launched alongside Chinese asset manager Harvest Global Investments, will provide investors with exposure to Mainland companies with market capitalisations averaging US$1.2 billion.

“DeAWM manages the largest China A-Shares ETFs listed in Europe and the US, while the Harvest Group manages the largest China A-shares ETF in Mainland China,” said Marco Montanari, DeAWM’s head of passive asset management, Asia-Pacific, in a statement. “With our strong combined capabilities, we are able to provide investors with more choices to access China's exciting potential.” 

DeAWM said that in comparison to China’s large cap segment, the A-share small cap segment offered outperformance in the past five years compared to the CSI 300 index, and lower exposure to state-owned enterprises.

According to a fact sheet on DAWM’s website, the ETF’s largest sector weighting is industrials at 24.46%, followed by consumer discretionary at 17.16%. Weightings toward information technology and healthcare companies are 12.87% and 10.40%, respectively.

The announcement of the small cap RQFII ETF follows on from the launch of DAWM’s first US-listed RQFII ETF in November 2013 and a similar product in Europe in January 2014.