UBS Asset Management launches ETF Tracking 100 largest tech-driven Chinese companies
UBS Asset Management (UBS AM) has launched the first currency-hedged UCITS ETF designed to provide access to China's rapidly growing technology sector. The UBS ETF (LU) Solactive China Technology UCITS ETF aims to invest in the 100 largest technology-driven companies headquartered in mainland China.
In addition to selecting companies from the traditional technology sector and health technology sub-sector, the index also includes firms which derive the majority of their revenues from various innovative, technology-related business activities, including genomics, robotics and automation, cybersecurity, digital entertainment, cloud computing, future cars, blockchain and social media.
The Chinese government has targeted high-technology industries as a strategic growth priority. The investment to strengthen national players has started to pay off and the technology sector is one of the main growth drivers for the country, with its digital economy accounting for about 30 per cent of GDP – having more than doubled from 2008. Now, international investors are looking for ways to tap those opportunities.
Clemens Reuter, Global Head of ETF & Index Fund Client Coverage at UBS Asset Management, says: “We have had a presence in China for several decades and have built deep expertise in the country. This new ETF is part of UBS AM’s strategic focus to provide investors with innovative exposure to one of the world’s fastest growing markets. The fund incorporates stocks beyond ‘traditional tech’, including exposure to areas such as social media, future mobility or medical technologies companies, and shows our strength to create products that align client interest and China’s long-term economic trends.”
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “China’s innovation potential is driven by the country’s ambition to become the number one in virtually any discipline. This aspiration bears immense growth potential, which investors can now easily access through UBS Asset Management’s new China Technology ETF. UBS AM recognised investors’ demand in this space, and we are very happy to contribute with our index to this promising fund release.”
To achieve comprehensive market coverage, the Solactive China Technology index incorporates onshore, offshore as well as foreign listings of companies headquartered or incorporated in China. To keep the index replicable, only A-shares trading through Stock Connect are eligible and are included at 20 per cent of their free-float market capitalisation to reflect foreign ownership restrictions.
The UBS ETF (LU) Solactive China Technology UCITS ETF is available in two share classes. In addition to a USD-denominated share class, a Euro hedged share class is also available. Listings will be across key European exchanges including Xetra, Borsa Italiana and SIX Swiss Exchange.