Round Hill Investments is hoping to replicate the success of its Magnificent Seven ETF (MAGS) in China.
The company’s CEO, Dave Mazza, is set to launch the Lucky Eight ETF, which aims to be China’s answer to the success of Wall Street’s big tech stocks.
“There are a lot of question marks about the growth potential of the Chinese economy and Chinese consumers,” Mazza said Monday on CNBC’s “ETF Edge.” “But at the end of the day, we think investors are looking for precision exposure similar to what they found with MAGS.”
The Lucky Eight ETF, which will trade under the ticker “LCKY,” will include equal-weighted exposure to Tencent Holdings Ltd., Alibaba Group Holdings Ltd., Meituan Ltd., BYD Co., Xiaomi Corp., PDD Holdings Ltd., JD.com Inc. and Baidu Inc. at launch. The stocks were chosen because of their “market power in technological innovation,” according to a May 17 SEC filing by Round Hill.
“This could be an opportunity for investors to expand into China and invest in stocks that really matter, especially if we’re coming out of an economic slowdown,” Mazza said.
While existing exchange-traded funds such as the CraneShares CSI China Internet ETF offer broad exposure to Chinese tech companies, Mazza wants to give investors the option to focus on just a few of the sector’s biggest names.
“I’m a big believer in having a large portion of your portfolio broadly diversified,” Mazza said. “But if you just want those stocks, it’s hard to get that in some traditional China ETFs. And this ETF will do that.”
Pending SEC approval, the Lucky Eight ETF is expected to launch this summer.
Disclaimer
