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China Post launches smart-beta ETF

China Post launches smart-beta ETF

China Post Global has launched what it said is the first smart-beta ETF on China to launch in Europe.

The Market Access Stoxx China A Minimum Variance index Ucits ETF will track the performance of the Stoxx China A 900 Minimum Variance Unconstrained AM index, which selects and weights stocks listed on the Shanghai and Shenzhen stock exchanges based on their volatility and how heavily they are traded.

Danny Dolan, managing director of China Post Global, said there was significant investor demand for China exposure at present.

Mr Dolan said: "In many cases allocations are being held back by concerns about higher volatility.

"The minimum variance approach works to address these volatility concerns while maintaining sufficient liquidity, aiming to give investors access to higher risk-adjusted returns in the medium- and long term."

Raj Shah, head of Blue Wealth Capital in Sheffield, said the fund was niche.

He said: "My main question is why people would want this rather than to go global."

The ETF uses full physical replication and has a total expense ratio (TER) of 0.65 per cent.

Mr Dolan said it is intended as "a cost-effective alternative to actively-managed funds".

rosie.murray-west@ft.com