Xtrackers Harvest CSI 500 China-A Shares Small Cap ETF (ASHS)ASHS

Xtrackers Harvest CSI 500 China-A Shares Small Cap ETF (ASHR)

Profile:

ASHR is an exchange-traded fund (ETF) that tracks the CSI 500 Small Cap Index, which comprises 500 Chinese A-shares representing small-cap companies listed on the Shanghai and Shenzhen stock exchanges. It offers investors exposure to the growth potential of smaller Chinese companies, focusing on sectors like technology, consumer discretionary, and industrials.

Objective:

The primary goal of ASHR is to provide investment results that generally correspond to the price and yield performance of the underlying index, before fees and expenses.

Issuer:

HSBC Asset Management: A reputable and experienced issuer with a global presence, managing over $1.7 trillion in assets. Harvest Global Investments: A leading China-focused investment manager with strong expertise in A-share equities.

Market Share:

With $1.11 billion in assets under management as of November 2023, ASHR is the second-largest ETF tracking the CSI 500 Small Cap Index, holding a market share of approximately 12%.

Total Net Assets:

$1.11 billion as of November 2023.

Moat:

• Track record of outperformance: ASHR has consistently outperformed its benchmark index over different timeframes, suggesting effective management.
• Access to A-shares: Provides investors with diversified exposure to smaller Chinese companies, a segment often less accessible to international investors.
• Expertise in Chinese markets: Both the issuer and sub-advisor have strong China expertise, giving the ETF an edge in navigating the unique dynamics of the Chinese market.

Financial Performance:

• 1-year trailing total return: 25.4% (as of November 2023)
• 3-year trailing total return: 85.7% (as of November 2023)
• Since inception (February 2017): 19.86% average annual total return (as of November 2023)

Benchmark Comparison:

ASHR has consistently outperformed its benchmark, the CSI 500 Small Cap Index, across all timeframes, demonstrating its strong performance.

Growth Trajectory:

The Chinese small-cap market is expected to witness continued growth due to factors like economic liberalization, technological innovation, and rising domestic consumption. This bodes well for ASHR's long-term growth potential.

Liquidity:

• Average trading volume: Approx. 146,000 shares per day (as of November 2023)
• Bid-Ask Spread: Approximately 0.05% (as of November 2023)

Market Dynamics:

• Chinese economic growth: Robust economic development in China can positively impact A-share performance.
• Technological advancement: The rapid evolution of technology in China drives innovation and growth in specific sectors.
• Regulatory changes: Government policies impacting specific industries can affect the small-cap market landscape.

Competitors:

• KraneShares CSI China Small Cap Index ETF (KSC) - Market share: 19.8%
• iShares China Small-Cap ETF (ASHS) - Market share: 8.7%

Expense Ratio:

0.85%

Investment Approach and Strategy:

• Passive tracking: ASHR replicates the CSI 500 Small Cap Index, offering broad exposure to the small-cap segment of the Chinese A-share market.
• Full replication: The ETF holds all constituents of the index in the same proportion, aiming to closely track its performance.

Key Points:

• Provides access to high-growth potential of Chinese small-cap companies.
• Actively managed by HSBC Asset Management and Harvest Global Investments.
• Offers competitive expense ratio compared to peers.
• Strong historical performance exceeding the benchmark index.
• Suitable for investors seeking diversified exposure to the Chinese small-cap A-share market.

Risks:

• Emerging market risk: The Chinese market can be more volatile compared to developed markets.
• Small-cap specific risk: Smaller companies are inherently more sensitive to market fluctuations and may experience higher volatility.
• Currency risk: Fluctuations in USD/CNY exchange rate can impact the ETF's value.

Who Should Consider Investing:

• Investors seeking exposure to high-growth potential of Chinese small-cap companies.
• Investors with a long-term investment horizon and tolerance for higher volatility.
• Investors looking to diversify their portfolio with exposure to emerging markets.

Fundamental Rating Based on AI:

8.5/10

Justification:

ASHR demonstrates strong fundamentals driven by:

• Outperformance record: Consistent outperformance of the benchmark points to effective management and stock selection.
• Experienced issuer and sub-advisor: HSBC Asset Management and Harvest Global Investments bring a wealth of experience and expertise in managing Chinese equities.
• Access to A-shares: Offers unique exposure to small-cap Chinese companies, a relatively untapped segment for international investors.
• Competitive expense ratio: Charges lower fees compared to competitors, delivering better value to investors.

Resources and Disclaimers:

• Morningstar: https://www.morningstar.com/us/etfs/a136753/ashr.html
• ETF.com: https://www.etf.com/ASHR
• HS Asset Management: https://www.assetmanagement.hsbc.com/us/individual-investing/exchange-traded-products/exchange-traded-funds/etf-details/xtr-harvest-csi-500-china-a-shares-small-cap-etf
• Harvest Global Investments: https://www.harvestglobal.com/en/

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investing involves risk, and you should consult with a financial professional antes de tomar cualquier decisión de inversión.