• China

    New ETF - pre-register today: China New Economy

    Arian Neiron, Managing Director
    21 October 2018

    We are excited to reveal that our newest and upcoming ETF is the VanEck Vectors China New Economy ETF (ASX: CNEW).

    Click here to register

    Everyone knows China is the most populous nation on the planet and has had two golden decades with GDP increasing nine times. Traditionally, economies like China have been dependent on energy, industrials, materials and financials. As GDP per capita increased, domestic policy and reform has been focussed on transitioning the economy to be consumption led. This is an immense change.

    Source: Minack Advisers

    China’s economy is undergoing a profound transformation in which consumer-oriented sectors are gradually replacing heavy industry and low-cost manufacturing as the country’s economic engines. Just look at what 30 years has done to the Shanghai skyline.

    This transformation is fuelling growth in consumer staples, consumer discretionary, technology and healthcare. It is these sectors which make up the New Economy.

    We are excited to reveal that our newest and upcoming ETF is the VanEck Vectors China New Economy ETF (ASX: CNEW).

    CNEW will track a state-of-the-art smart beta index: the CSI MarketGrader China New Economy Index.

    CSI MarketGrader China New Economy Index

    The index covers a universe of ~2,900 China A-shares, screens the universe for liquidity and investability, and then grades all securities based on 24 fundamental indicators across four analytical categories: growth; value; profitability; and cash flow.

    The objective is to identify securities that offer the best potential for ‘growth at a reasonable price’ (‘GARP’). When investing in China you want to access the structural growth story that is becoming the new economy.

    Securities are graded from 0 to 100. The top 30 ranking securities are then included from each of the following four major New Economy sectors:

    • Healthcare
    • Technology
    • Consumer Discretionary; and
    • Consumer Staples.

    The portfolio of 120 China A-shares is then equally weighted and rebalanced semi-annually.

    Access to China A-shares

    This opportunity is not easy to access. Investing in some China A-shares is no simple feat and only a handful of Australian institutional investors, including VanEck, have a Renminbi Qualified Foreign Institutional Investor (RQFII) license and quota, enabling us to invest directly in all A-shares.

    For the first time in Australia, VanEck will soon be offering Australian investors the ability to step into tomorrow’s prosperity in China via an ETF on ASX.

    Key points:

    • This is one of the most exciting potential growth opportunities of the 21stcentury as China transitions from a manufacturing to a consumption led economy
    • The VanEck Vectors China New Economy ETF (ASX: CNEW) is an Australian first, leveraging VanEck’s RQFII license and a state-of-the-art smart beta strategy
    • CNEW’s index, the CSI MarketGrader China New Economy Index, seeks to follow the most fundamentally sound companies with the best potential growth prospects in the consumer staples, consumer discretionary, technology, and healthcare sectors that are domiciled and listed in Mainland China.  
    • No foreign tax paperwork and no exposure to US estate tax.

    Click here to register




    This information is prepared in good faith by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’) as the responsible entity and issuer of VanEck Vectors China New Economy ETF (the Fund). Units in the Fund are not currently available. The Fund has been registered by ASIC and VanEck has lodged an application with ASX for units in the Fund to be admitted to trading status on ASX under the code ‘CNEW’.

    This information is general in nature and not financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Before making an investment decision investors should read the product disclosure statement and with the assistance of a financial adviser consider if it is appropriate for their circumstances. A copy of the PDS is not yet available. The PDS will be lodged with ASIC OFFERlist in coming weeks and will be available after the end of the exposure period at www.vaneck.com.au or by calling 1300 68 38 37.

    An investment in the Fund is subject to various risks that may have the effect of reducing the value of the Fund, resulting in a loss of capital invested and a lack of income from the Fund. Chinese securities have heightened risks compared to investing in the Australian market. These risks include currency risks from foreign exchange fluctuations, ASX trading time differences, foreign laws and regulations including taxation, potential difficulties in enforcing contractual obligations, changes in government policy, expropriation, economic conditions including international trade barriers, restrictions on foreign ownership, securities trading restrictions, restrictions on repatriation and restrictions on currency conversion. No member of the VanEck group guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from the Fund.

    The Fund tracks the CSI MarketGrader China New Economy Index. "MarketGrader" And “CSI MarketGrader China New Economy Index” are trademarks of MarketGrader.com Corporation. MarketGrader does not sponsor, endorse, sell or promote the Fund and makes no representation regarding the advisability of investing in the Fund. The inclusion of a particular security in the Index does not reflect in any way an opinion of MarketGrader or its affiliates with respect to the investment merits of such security.