Asset manager VanEck has listed Europe’s “first” exchange traded fund (ETF) that provides access to Chinese companies while taking ESG criteria into account.
The VanEck New China ESG Ucits ETF launched on the London Stock Exchange and Xetra Deutsche Borse on 29 September 2021, and will also be available on Ceinex, the Deutsche Borse platform for China-related financial products in Europe.
The fund gives access to the “100 strongest companies in China’s new economy”, the firm said, and only those that meet ESG criteria set out by data platform Owl Analytics will be included.
“It’s a new kind of consumer that is behind China’s amazing growth,” said Martijn Rozemuller, chief executive of VanEck Europe.
“They spend their money on innovative technologies, healthcare services, pharmaceuticals, consumer and luxury goods. China’s economy continues to develop and companies in the country are adapting to the new consumer realities.
“Chinese companies that are part of the new economy are likely to outpace the country’s overall growth.”
The ETF tracks the MarketGrader New China ESG Index, which includes only companies from four sectors, namely non-consumer staples, consumer staples, technology and healthcare.
The index selects the 100 companies based on growth, valuation, profitability and cash flow. The businesses must also exceed the regional median ESG score, determined by Owl Analytics.
The data provider quantifies corporate behaviour against 30 core metrics related to ESG factors, as well.
The fund is domiciled in Ireland and has US dollars as its base currency, with reweighting happening every six months.