An independent investment management company, Invesco, is launching the first European exchange traded fund (EFT) tracking China’s ChiNext 50 index, reports the Financial Times. Invesco’s listing comes as closures of China-focused ETFs have risen to a record level, with investors and fund houses withdrawing after years of poor stock market performance and rising geopolitical frictions that have led some to question the ethics of investing in the country.
Fund managers globally scrapped 18 China ETFs in the first quarter of 2024, more than half of last year’s record total of 34 closures, according to data from Morningstar Direct, with Global X, Xtrackers and KraneShares among those wielding the axe.
The rate of launches has also slowed sharply, with just 33 China ETFs unveiled in Q1 — all but three of them domiciled in either China or Taiwan. This compares with 160 launches during calendar year 2023 and a record 291 during the peak of Sino mania in 2021.