Smart Beta ETFs Embraced Amid A-Share Downturn
October 12, 2018
Yue Yue and Han Wei
In the face of China’s stock-market slump, two Hong Kong exchange-traded funds (ETFs) that debuted a year ago are posting growth, reflecting increased holdings of Chinese stocks in foreign portfolios and the funds’ unconventional investment strategies. The two major mainland bourses tumbled to near four-year lows Thursday, recording their biggest daily declines in 2½ years. While this week’s volatility is part of a global pullback, the two main Chinese benchmarks have struggled in bear territory this year on concerns about China’s slowing economic growth and the worsening trade war with the U.S. Assets of the Premia CSI Caixin China Bedrock Economy ETF rose 45% since its launch a year ago, and the Premia CSI Caixin China New Economy ETF gained nearly 20%. The two ETFs are derived from smart beta indexes developed by Caixin Rayliant, a sister company of Caixin Global. Hong Kong-based Premia Partners manages the ETFs.