Rationing of China ETFs Hits U.S. Market as Demand Soars
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The fund managers running the X-trackers Harvest CSI 300 China A-Shares ETF at Deutsche Asset & Wealth Management are facing a problem their rivals would love to have. They’re luring too much money.
In the span of five days last month, the U.S.-based exchange-traded fund pulled in $130 million, sending assets surging by 33 percent to $515 million and nearly exhausting its Chinese government-imposed A-share purchasing quota. Managers were forced to get creative. They limited new creations and borrowed quota from another fund to avoid closing the year-old ETF to inflows and keep a potentially disruptive premium to underlying assets from developing.