VanEck drops fees on ETF

Australia's first China A-shares ETF has knocked 12bps off its annual management fees, after a decision taken by the board in the United States.

The VanEck Vectors ChinaAMC CSI 300 ETF (ASX: CETF) will now charge 0.60% instead of the 0.72%.

The reduced fee is valid at least until July 2020 around when the board for VanEck Vectors in the US will decide on the fee again, as is standard practice.

CETF launched in Australia in June 2015 as a cross-listing of the American ETF through chess depository interests. The CSI 300 Index represents the largest and most liquid shares listed on the two stock exchanges in China's mainland, Shanghai and Shenzhen.

The ETF has raised $17 million in the three and a half years since. The index which it tracks has taken a beating, having lost 9.8% in Australian Dollar terms since last year.

VanEck head of Asia Pacific Arian Neiron said Aussie investors were slow in putting money in CETF as the index underperformed right after its ETF's Australia launch.

"We have picked up [investor FUM] in the second half of 2018," Neiron said.

"If you look at the China A-shares ETFS in the United States, it is quite a competitive landscape," he said. "And VanEck has reached scale, so it is possible to make the fee cuts."

Neiron says the company doesn't have a hard target for CETF's inflows after the fee cuts.

"If something positive comes out of the US-China trade war, and if valuations start to look compelling to Australian investors, [inflows might pick up]," he said.

Read more: CETFAiron NeironAsia PacificChina A-shares ETFSVanEck Vectors ChinaAMC CSI
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