Shenzhen-based asset manager Bosera Fund Management has launched a new ETF in China providing exposure to mid- and small-cap China A-share equities.

Bosera has launched a CSI 500 China A-share ETF on SZSE.

The Bosera CSI 500 ETF (159968 CH) has listed on Shenzhen Stock Exchange and comes with a management fee of 0.15%.

The fund is linked to the CSI 500 Index, which selects its constituents from the parent CSI All Share Index of China A-share stocks.

A-shares are Mainland-listed and domiciled, renminbi-denominated stocks that trade on either the Shanghai or Shenzhen stock exchanges.

The parent index includes all A-shares that have been trading for at least three months.

The methodology removes the constituents of the CSI 300 Index, a composition of the 300 largest A-share stocks that satisfy liquidity thresholds, as well as any stock in the top 300 by market cap that does not satisfy the CSI 300’s liquidity test.

The remaining stocks are then ranked by average daily trading value over the past year with the bottom 20% eliminated. The index selects the 500 firms with the highest market cap to form the index.

Constituents are weighted by float-adjusted market capitalization. Reconstitution and rebalancing occur semi-annually in June and December with the index adopting buffer zones to limit unnecessary turnover.

The largest sector exposures are industrials (20.2%) and information technology (19.0%), followed by materials (15.1%), consumer discretionary (10.9%), and healthcare (10.8%). The index is well-diversified at the constituent level with the largest stock exposure being Wingtech technology at 1.1%.

The fund joins a crowded field with a further eight CSI 500 ETFs listed in China across the Shanghai and Shenzhen stock exchanges. It is, however, the cheapest and by some margin. Rival CSI 500 ETFs charge management fees between 0.50% and 0.63%.