VanEck New China ESG UCITS ETF
- Access China’s new economy
- Exposure to the sectors forecasted to lead future growth
- Diversified basket of companies
- Thorough screening from both a financial and ESG standpoint
China’s booming new economy is increasingly relevant in the global landscape. VanEck China ETF captures this potential and focuses on the implications of what could become the largest middle class in the world.
ETF Details
ETF Details
Basis-Ticker: CNEWISIN: IE0000H445G8
WKN: A3CR8S
TER: 0.60%
AUM: $7.2M (Data as of 15/02/2023)
SFDR Classification: Article 8
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Risk: You may lose money up to the total loss of your investment due to Emerging Markets Risk and Risk of investing in smaller companies as described in the Main Risk Factors, KID and prospectus.
VanEck's China New Economy ETF
With a population of over 1.4 billion people, China has a vast and diverse market, offering significant potential for investors. The country's young population, with a median age of just 38, is expected to drive economic growth and consumer spending for years to come. China's rapidly growing wealth presents additional opportunities for investors. Investing in VanEck's China New Economy ETF allows you to access this exciting growth potential. With a single investment, you can gain exposure to a diversified portfolio of companies that are uniquely positioned to capitalize on China's new economy and the country's dynamic population and expanding middle class.
China Could Be on Track to Become the Largest Economy in the World
According to some projections, China is expected to surpass the United States as the world's largest economy in the coming years. The country's impressive growth trajectory shows no signs of slowing down anytime soon. China has made significant investments in research and development, infrastructure, and emerging technologies like artificial intelligence and 5G. These efforts have enabled China to become a global leader in many key industries and positioned it to continue growing its economy well into the future. The following factors will be particularly crucial for growth:
China’s Economic Ascent
After an already impressive climb over the past decades, the country’s economy could still...
After an already impressive climb over the past decades, the country’s economy could still...
China’s Forecasted Surpassing of the US
According to some projections, it is only a matter of a few years before the overcoming takes place...
According to some projections, it is only a matter of a few years before the overcoming takes place...
Relatively Stable Currency
The Chinese Yuan has exhibited relative stability with the USD...
The Chinese Yuan has exhibited relative stability with the USD...
China’s Growing Middle Class is Fueling Its Expansion
China’s middle class is growing at a pace much faster than other major economies. It could soon have the largest middle class in the world. As a consequence, certain sectors are poised to benefit more than others, also thanks to the rising GDP per capita and overall welfare in the country.
The following graph displays the share of urban households by income. It is remarkable how, until the 80s, almost all households were classified as poor. After the first wave representing the growth of a lower middle class segment, the upper middle class becomes the largest social class. By 2025, almost 60% of Chinese urban households are forecasted to belong to the upper middle class.
Share of urban households per income
Source: National Bureau of Statistics of China, McKinsey Global Institute analysis.Source: World Bank national accounts data and OECD National Accounts data files as of 2022.
VanEck China ETF Targets the Country’s New Economy
The Fund enables an investment in the growing new economy of the country. After careful analysis of demographic and macroeconomic trends shaping China and the rest of Asia, it targets specific sectors expected to lead the growth in the next decades. In the wake of a rising upper middle class and disposable income, sectors like consumer discretionary and staples, information technology and healthcare are expected to outperform.
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Thorough Financial and ESG Screening
China ETF by VanEck adopts a detailed approach to filter the companies included in the investment strategy. Both fundamental and ESG related factors are taken into account.
VanEck China ETF tracks the MarketGrader New China ESG index which applies a sound fundamental evaluation of the companies that are included in the portfolio. The process starts by screening their financial statements and measuring if these businesses present the characteristics necessary to generate long term sustainable returns. Afterward, several indicators are grouped into a single score from 0 to 100, where a value larger than 60 stands for a BUY rating. This way, a uniform, and standardized approach is adopted to identify good investment opportunities.
Coherent with the overall efforts of offering investors a sustainable and responsible investment solution, VanEck leverages the expertise of Owl Analytics. Owl utilizes the largest ESG data set in the industry based on corporate disclosures, filings, news sources and research firms.
Performance of China ETF
Source: MarketGrader. Past performance is no guarantee of future results. Index performance is not representative of fund performance. Investors cannot invest directly in the Index. The Morningstar Global Wide Moat Focus Index was launched on 22 March 2021. Prior periods show simulated index data created from backtesting (“Simulated past performance”). Simulated past performance does not reflect a deduction for fees and expenses of the VanEck New China ESG UCITS ETF (“the Fund”) and is not indicative of future results.
Key Documents and Links
Main Risk Factors of a China ETF
Because all or a portion of the Fund are being invested in securities denominated in foreign currencies, the Fund's exposure to foreign currencies and changes in the value of foreign currencies versus the base currency may result in reduced returns for the Fund, and the value of certain foreign currencies may be subject to a high degree of fluctuation. This is a factor to take into account when considering an investment in this ETF.
Investments in emerging market countries are subject to specific risks and securities are generally less liquid and less efficient and securities markets may be less well regulated. Specific risks may be heightened by currency fluctuations and exchange control; imposition of restrictions on the repatriation of funds or other assets; governmental interference; higher inflation; social, economic and political uncertainties. A further risk of investing in this ETF is that the assessment of Chinese financial reports by relevant regulators may not be adequate.
The securities of smaller companies may be more volatile and less liquid than the securities of large companies. Smaller companies, when compared with larger companies, may have a shorter history of operations, fewer financial resources, less competitive strength, may have a less diversified product line, may be more susceptible to market pressure and may have a smaller market for their securities. This is another factor to take into consideration before investing in a China ETF.