DWS bucks trend with launch of Chinese mid-cap ETF

Stay up to date with free updates

Simply register at Exchange Traded Funds myFT Digest — delivered straight to your inbox.

DWS has launched a synthetic exchange-traded fund that invests in mid-cap Chinese stocks.

Xtrackers CSI500 Swap Ucits ETF uses indirect replication to track the CSI 500 Net Total Return Index, which consists of the 500 mid-cap and small-cap companies traded on the Shanghai Stock Exchange or the Shenzhen Stock Exchange.

Launched in late July, the ETF has a total expense ratio of 0.35% and has been registered for sale across much of Europe, including France, Germany and Italy.

The ETF’s launch comes after several asset managers either closed their China-focused funds or announced plans to close such vehicles after struggling to attract enough investor interest.

Last month it emerged that US-based ETF provider Global X ETFs is to close three Irish-based Chinese equity ETFs at the end of this month.

State Street Global Advisors delisted its Ireland-domiciled SPDR Bloomberg China Treasury Bond Ucits ETF from the London Stock Exchange last month due to lack of demand, while US-based Krane Funds Advisors closed two Irish-based Chinese ETFs in May.

Barings closed its China A-share fund in May after investor demand waned.

In March, Invesco closed a quantitative fund that invests in mainland Chinese stocks because of its failure to gather enough assets.

China equity funds based in Europe suffered net outflows of 3.9 billion euros in the first four months of 2024, according to Morningstar data.

DWS launched an ex-China emerging market equity ETF last week amid rising demand for such products as investors seek to reduce their exposure to China.