Global X expands thematic ETF range with China Biotech Innovation ETF (CHB) tracking a Solactive Index
Solactive has launched a thematic index providing targeted exposure towards the rapidly growing Chinese biotechnology sector, which is being used by Global X for a new thematic ETF.
The Solactive China Biotech Innovation Index aims to track the individual performance of twenty-seven of the largest and most liquid Chinese companies active in the field of Biotechnology. The ETF aims to deliver efficient access to a theme and industry characterised by high growth potential at the forefront of technological progress, biological advancement, and applied product development.
China’s continued economic growth, demographic structure, strategic emphasis on the domestic biotechnology sector are expected to continue to represent a tailwind for the index’s constituents going forward. Research company Global Market Insights forecasts the global industry to grow at a compound annual growth rate of 9.9 per cent, reaching USD775 billion expected annual revenue in 2024.
“There is a sheer force of innovation in life-science and biotech, with a lot of revenue being put back into R&D,” says Timo Pfeiffer, Chief Markets Officer at Solactive. “Hong Kong has become a key hub for Biotech IPOs, and our new index takes advantage of this emerging centre of innovation. With our involvement in the launch of the latest Global X ETF, we are pleased to help make this exposure investable for clients in the US.”
The Index universe of the Solactive Chinese Biotech Innovation Index includes companies headquartered in China and Hong Kong and classified as active in the Biotechnology industry and which are listed on any of the following stock exchanges: HKSE, Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, NYSE, and NASDAQ. Minimum Average Daily Value Traded and Free Float Market Capitalisation filters are applied to ensure the liquidity and size of the selected companies. Furthermore, eligible securities include H- Shares, Red Chips, P-Chips, A-Shares, ADRs, and common stocks with a primary listing on the NYSE or NASDAQ.
The addition of the Solactive Chinese Biotech Innovation Index strengthens Solactive’s index suite in the thematic space with targeted exposure to companies involved in the emerging Chinese biotech market.