Deutsche Bank AG's asset management unit started the first U.S.-based exchange traded fund that allows investors to buy Chinese stocks trading in both the domestic and foreign markets.
The ETF will track the MSCI All China Equity Index, which includes 612 companies listed in China, Hong Kong, the U.S. and Singapore, Deutsche Asset and Wealth Management said in a statement.
Foreign investors are not allowed to buy local Chinese shares unless they are granted licenses and individual quotas by regulators. The total approved quota is about $86 billion, less than 3 percent of the $3.3 trillion market value of locally listed companies.
Deutsche Bank in November started the db X-trackers Harvest CSI 300 China A-Shares Fund, the first U.S. ETF investing in the Chinese domestic market.
“The first China ETF was ''very well received,'' said Martin Kremenstein, U.S. head of exchange-traded products for Deutsche Asset and Wealth Management. ''We'd like to give clients broader access to the Chinese market.''
The MSCI All China index has lost about 9% this year. The db X-trackers Harvest CSI 300 is down 11% while the Bloomberg China-U.S. Equity Index slumped 6.8%.