Roundhill Investments wants to replicate the success of its Magnificent Seven ETF (MAGS) in China.
The firm’s CEO Dave Mazza plans to launch the Lucky Eight ETF, which is intended to be China’s answer to the success of Wall Street’s big tech stocks.
“There are a lot of questions about the Chinese economy and the potential for consumer demand growth in China,” Mazza said in an interview with CNBC’s “ETF Edge” on Monday. “But at the end of the day, we believe investors are looking for risks that give them precision, as we found with MAGS.”
Trading under the ticker symbol “LCKY”, the Lucky Eight ETF will include an equal-weighted holding in Tencent Holdings. Alibaba, Meituan, BIDXiaomi, SDA Holdings, JD.com And Baidu at startup. According to Roundhill’s May 17 SEC filing, the names were chosen because of their “dominance in the technology innovation market.”
“Especially if they’re coming out of an economic downturn, this could be an opportunity for investors to get into China and do it under names that actually matter,” Mazza said.
Although existing exchange-traded funds such as KraneShares CSI China Internet ETF By offering broad exposure to Chinese technology, Mazza hopes to give investors the opportunity to focus on just a few key names in the space.
“I’m a big believer in broad diversification of large portions of the portfolio,” Mazza said. “But if you just want those names, they’re hard to get with some traditional Chinese ETFs. And this will help.”
Pending SEC approval, the Lucky Eight ETF is scheduled to launch this summer.
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