Chinese IP-based businesses are all the rage these days
Chinese big pharma ETF
Two new ETFs have gone live in China that track various Chinese IP-based businesses. The well-timed Yinhua CSI Brand Name Drug Industry ETF (159992) will invest in 50 Chinese pharmaceutical companies that do R&D for brand name drugs. To qualify, companies have to meet de minimus size and liquidity requirements. Stocks are then selected based on whose products are patent protected and weighted by market capitalisation.
If a coronavirus vaccine comes out of China – it very well might – then ones suspects this ETF will do very well indeed.
Alibaba-backed tech ETF
Alibaba-owned Tianhong Asset Management is listing a Chinese tech ETF that focusses on computers. The Tianhong CSI Computer ETF (159998) will invest in 100 stocks involves in IT services, systems software, application software and computer hardware industry as constituents.
As Ant Financial – the finance arm of Alibaba – owns a 51% stake in Tianhong, one wonders how the fund it might feed into Alibaba’s other fintech businesses in order to hoover up assets.