Henderson Rowe teams with Premia Partners to offer smart beta China equity ETFs

Henderson Rowe has collaborated with Premia Partners, an ETF provider in Hong Kong that focuses on Asia ETFs and smart beta solutions, to offer two Premia China A ETFs for its customised portfolios.

The Premia ETFs underpin scientific methodology by Caixin Rayliant Smart Beta which, through years of academic research on factor anomalies in China, identifies several equity factors including value, quality, low volatility and size with the potential to outperform the broader A-shares equity market over the long term. The fundamental beta approach also leverages a buy-low, sell-high strategy for factor investing, contrary to a traditional market capitalisation strategy.
The two smart beta China equity ETFs are designed to provide investors with diversified exposure to the China A-shares market. Listed on HKEX, the Premia CSI Caixin China Bedrock Economy ETF and Premia CSI Caixin China New Economy ETF, are physical A-shares ETFs that utilise a fundamental, multi-factor approach, and each consists of approximately 300 Shanghai and Shenzhen listed stocks. They utilise the China-Hong Kong Stock Connect and have a total expense ratio of 0.50 per cent p.a. compared to the 1 per cent average fee typically observed in the industry. Since its launch in late 2017, the Premia CSI Caixin China New Economy ETF has amassed over US$100 million in assets and is the best performing China A-shares ETF year-to-date globally.
Henderson Rowe has seen demand from investors increasingly looking for strategies that provide efficient access to the Mainland opportunities while seeking to generate above-market returns. That contrasts with simply buying the largest companies by market capitalisation or focusing on the state-owned enterprise or financial sectors.
Artur Baluszynski, Director and Head of Research at Henderson Rowe, says: “China is an enormous market and as the economy continues to expand, its financial markets become increasingly relevant for global investors. We are therefore delighted to collaborate with Premia Partners who share our passion for bringing innovative investment strategies at low cost that generate long term value for investors.
“Our success is built upon providing a bespoke and personalised service for all clients. We provide institutional-quality solutions that blend advanced quantitative core portfolios with high-conviction fundamental stock selections.”
Rebecca Chua, Managing Partner of Premia Partners, says: “We are delighted to work with Henderson Rowe to provide its investors efficient access to China onshore opportunities. These two ETFs are the first fundamental multi-factor ETFs based on robust academic research. They provide investors with differentiated and diversified portfolios of leaders for the mainstream and new economy sectors, as China continues its structural growth and transformation. Similar to other Premia ETFs covering Asia Innovative Technology, EM ASEAN, Vietnam and US Treasury, they are physically replicated, low-cost building blocks to facilitate efficient asset allocation for investors accessing growth opportunities in Asia.”

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