Roundhill Investments wants to emulate the success of its Magnificent Seven ETF (MAGS) in China.
The company's CEO Dave Mazza plans to launch the Lucky Eight ETF, which aims to be China's answer to the success of big tech stocks on Wall Street.
“There are a lot of question marks about the Chinese economy and China's consumer growth potential,” Mazza told CNBC's “ETF Edge” on Monday. “But ultimately, we think investors are looking for exposures that give them precision, just as we found with MAGS.”
The Lucky Eight ETF trades under the ticker “LCKY” and will include equal-weighted exposure to Tencent Holdings, Ali Baba, Meituan, BYDXiaomi, PDD Holding, JD.com And Baidu At launch. According to Roundhill's May 17 SEC filing, these names were chosen due to their “market dominance in technology innovation.”
“Especially if they are coming out of an economic slowdown, this could be an opportunity for investors to get into China and do it with the really important names,” Mazza said.
While existing exchange-traded funds such as KraneShares CSI China Internet ETF By offering a broad exposure to Chinese technology, Maza hopes to give investors the option to focus on a few key names in the field.
“I strongly believe in broad diversification of large parts of the portfolio,” Mazza said. “But if you just want those names, it's hard to get some traditional Chinese ETFs. This will do it.”
Pending SEC approval, the Lucky Eight ETF is scheduled to launch this summer.
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