Roundhill Investments hopes to emulate the success of its Magnificent Seven ETF (MAGS) in China.
Chief Executive Dave Mazza plans to launch the Lucky Eight ETF, aiming to be China’s answer to the success of Wall Street’s big tech stocks.
“There are a lot of questions about the growth potential of the Chinese economy and Chinese consumers,” Mazar told CNBC’s “ETF Edge” on Monday. “But at the end of the day, we believe investors are looking for exposure that provides precision, Just like what we found in MAGS.”
The Lucky Eight ETF trades under “LCKY” and will include equal-weighted exposure to Tencent Holdings, Alibaba, Meituan, BYDMillet, Pinduoduo Holdings, Jingdong and Baidu at launch. The names were chosen because they “hold market dominance in technological innovation,” according to Roundhill’s May 17 SEC filing.
“Especially if they are emerging from a slowdown, this could be an opportunity for investors to come into China and invest with names that really matter,” Mazza said.
While existing exchange-traded funds, e.g. Jinrui CSI China Internet ETF Mazza offers broad exposure to Chinese tech, hoping to give investors the option of focusing on just a few key companies in the space.
“I’m a firm believer that the majority of a portfolio should be broadly diversified,” Mazza said. “But if you just want these names, some of the traditional China ETFs are hard to come by. And this will do that. “
Pending approval from the U.S. Securities and Exchange Commission (SEC), the Lucky Eight ETF will launch this summer.
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