PowerShares ETFs

CHNA - PowerShares China A-Share Portfolio

Equity - International and Global Equity
Actively managed

Product Details

The PowerShares China A-Share Portfolio (Fund) is an actively managed exchange-traded fund (ETF) that seeks to achieve its investment objective by providing exposure to the China A-Share market. The Fund seeks to provide long-term capital appreciation using a quantitative, rules-based investment strategy designed to provide exposure to the China A-Share market using SGX FTSE China A50 Index futures contracts.

as of 06/30/2015 06/30/2015

Performance


   
as of 06/30/2015 06/30/2015
  YTD 1 Year 3 Year 5 Year 10 Year Fund Inception
Index History (%)
FTSE China A50 Index 10.71 89.75 18.72 10.47 16.12 36.34
Fund History (%)
Fund NAV 9.08 86.18 N/A N/A N/A 34.44
After Tax Held 9.08 86.18 N/A N/A N/A 34.44
After Tax Sold 5.14 48.78 N/A N/A N/A 26.87
Fund Market Price 8.78 86.54 N/A N/A N/A 34.20

Monthly Performance

Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. After-tax returns reflect the highest federal income tax rate but exclude state and local taxes. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower. After Tax Held and After Tax Sold are based on NAV. Returns less than one year are cumulative.


as of 06/30/2015

Growth of $10,000

Data beginning Fund inception and ending 06/30/2015. Fund performance shown at NAV.

An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

as of 08/03/2015 Holdings | View All

Fund Holdings subject to change

Investment Weight
SGX FTSE China A50 Futures Contract 100.00%
Collateral
STIT-Treasury Portfolio 14.82%
Premier Tax Exempt Portfolio 14.82%
STIT-Government & Agency Portfolio 12.81%
STIT-STIC Prime Portfolio 9.47%
Premier Portfolio 9.47%
THE BANK OF NY CASH RESERVE 1.30%
CASH & EQUIVALENTS -5.35%

Frequency Distribution of Discounts & Premiums

    Bid/Ask MidPoint Above NAV Bid/Ask Midpoint Below NAV
Quarter
Ending
Days 0.50-
0.99%
1.00-
1.99%
>2.00% 0.50-
0.99%
1.00-
1.99%
>2.00%
06/30/2015 63 14 1 1 3 2 1
03/31/2015 61 12 2 1 5 2 1
12/31/2014 64 8 1 2 9 6 0
09/30/2014 64 3 2 1 9 0 0
Year Ended 2014 252 31 6 3 28 9 1

Fund Inception: 10/10/2013

About PowerShares China A-Share Portfolio

Over the last two decades, the Chinese market has rapidly grown into the world's second largest economy. As China has grown, global investors have looked for ways to participate. Despite its remarkable growth, investing in the Chinese domestic equity market (or the China A-Share market) remains limited only to qualified foreign institutional (QFII) investors who must maneuver through a difficult application process to obtain a license and quota from the Chinese government.

Exposure to China A-Shares

Accessing Chinese companies listed in mainland China (A-Shares) has historically been very difficult for foreign investors due to governmental restrictions. PowerShares China A-Share Portfolio is the first exchange-traded fund (ETF) to provide efficient and liquid exposure to the China A-Share market primarily through investments in the SGX FTSE China A50 Index futures.

Exposure Flow Chart

Due to significant differences between the domestic A-Share market and other share classes which can be globally accessed, like H-Shares, prices of Chinese companies may differ greatly among those share classes. For example, H-Shares have historically traded at steep discounts to A-Shares, resulting in significant performance differences. Since 2005, the yearly average discount of H-Shares to A-Share is 13.6%.1

Liquid & Efficient Alternative

The use of the SGX FTSE China A50 Index futures is designed to provide exposure to China A-Shares. The SGX FTSE China A50 Index futures is the only offshore futures on the China A-Share market without any qualified foreign institutional investor (QFII) requirements, and is the most liquid offshore China A-Share investment vehicle.2 The U.S. Commodity Futures Trading Commission (CFTC) approved trading of the SGX FTSE China A50 Index futures by US investors in 2012.3

Cost Efficient4

PowerShares China A-Share Portfolio provides investors an expense ratio of 0.50% — 23 basis points (bps) less than its Morningstar category average. This cost differential may have significant implications on portfolio performance.

1 Source: Bloomberg L.P., as of Aug. 31, 2013. H-Share Discount to A-Share is represented by the Hang Seng A-H Premium Index.
2 Source: Singapore Exchange (SGX), as of Aug. 31, 2013
3 Source: Singapore Exchange (SGX), as of Jan. 30, 2012
4 Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs.

PowerShares China A-Share Portfolio is an actively managed ETF providing exposure to the China A-Share market by investing primarily in SGX FTSE China A50 Index futures.

Fund Features of CHNA:

  • Exposure to China A-Shares
  • Liquid & efficient alternative to direct investment in China A-Share market
  • Cost efficient1

To directly invest in China A-Shares, a foreign investor must apply for a qualified foreign institutional investor (QFII) license with the Chinese government. Should that investor be granted a QFII license, the investor is assigned a quota which could limit their investment amount in China A-Shares. If the quota is reached, the foreign investor must reapply to the Chinese government for additional capacity. There is no assurance that the Chinese government will grant an initial QFII license or increase quota to an existing license.

About the FTSE China A50 Index

The Index is a real-time index that provides exposure to the largest 50 A-Share companies on a market-cap- weighted basis. The Index has a correlation to the broader Chinese domestic equity market of 0.96 as represented by the CSI 300 Index.2

About SGX FTSE China A50 Index Futures

In order to facilitate trading and investment in mainland China by offshore participants, the Singapore Exchange (SGX) launched the SGX FTSE China A50 Index Futures contract in 2010. These futures contracts provide offshore investors an effective and cost-efficient means by which to obtain exposure to the China A-Share market and have experienced significant growth since their inception.

Index vs Futures

Source: Singapore Exchange (SGX), as of Aug. 31, 2013

1 Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs.
2 Source: Bloomberg L.P., from April 2005 through August 2013

There are risks involved with investing in ETFs, including possible loss of money. Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index-based and actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index.

The Fund does not intend to leverage.

The Fund's use of derivatives may increase the amount of risk associated with the Fund and may magnify changes in the Fund's value positively and negatively. The use of this fund may not be suitable for all investors.

The Fund is subject to management risk because it is an actively managed portfolio. There can be no guarantee that the investment techniques and risk analyses used in making investment decisions for the Fund will produce the desired results.

The Fund may have significant investment in futures contracts. Because futures contracts project price levels in the future, market circumstances may cause a discrepancy between the price of a stock index future and the movement in the FTSE China A50 Index. In the event of adverse price movements, the Fund would be required to make daily cash payments to maintain its required margin. The Fund also must segregate liquid assets or enter into off-setting positions to "cover" open positions in futures contracts. By investing in futures contracts, the Fund also is subject to capacity constraints and liquidity risks.

Investing in futures contracts based on the performance of Chinese companies involves several risks: The economy of China differs, sometimes unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others; the central government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership; and actions of the Chinese central and local government authorities continue to have a substantial effect on economic conditions in China. The regulatory oversight of Chinese companies differs from that in the United States and may not otherwise deter or uncover fraudulent actions by the issuers.

The A-Shares market in China is an emerging market with a limited operating history, and it is not as developed as capital markets in the United States. The various restrictions on the free flow of capital into the Chinese A-Shares market may adversely impact the liquidity of the market and increase the volatility of the trading prices of A-Shares, which in turn could impact the performance of the FTSE China A50 Index and of the Fund. The investment regulations in China under which the Fund would invest are relatively new and the application and interpretation of those investment regulations are relatively untested; therefore, if and when the Fund is permitted to invest directly in A-Shares, there is no certainty as to how they will be applied.

The Chinese government in the past has taken actions that benefited holders of A-Shares. If A-Shares continue to become more available to foreign investors, the Chinese government may be less likely to take action that would benefit holders of A-Shares. Moreover, the laws, regulations, government policies and political and economic climate in China may change with little or no advance notice, and there can be no assurance that the Chinese government will continue to take similar actions in the future. Any such change could adversely affect the market conditions for A-Shares.

If the Fund were to invest directly in A-Shares, such investments would be subject to pre-approved government limitations on the quantity of A-Shares in which the Fund may invest. If the Adviser obtains a QFII license, it would be required to remit the entire investment principal for its A-Share quota into a local sub-custodian account after the Adviser obtains a foreign exchange registration certificate from the Chinese government agency responsible for foreign exchange administration. Once remitted, investment capital only may be repatriated at certain designated times. Repatriation of investment capital and profits currently is subject to a lock-up period and other restrictions. This means that the Fund may be limited in its ability to transfer its investment principal for the Fund's A-Share quota outside of China. Future changes to the repatriation rules could further limit the Fund's ability to repatriate capital and could have a negative effect on the Fund's operations.

Investments in the foreign securities involve additional risks, such as less reliable financial information, higher transactional costs, taxation by foreign governments, decreased market liquidity and greater market volatility and political instability.

The dollar value of the Fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded.

If the Fund invests in another ETF to obtain exposure to the China A-Shares market, it will be subject to the risks associated with the underlying ETF, which include, but are not limited to, the risk that the underlying ETF's investment strategy may not produce the intended results. The Fund also may pay indirectly a proportional share of the fees and expenses of the underlying ETFs in which it invests.

The Fund's investments in U.S. Government securities will change in value in response to interest rate changes and other factors, such as the perception of an issuer's creditworthiness. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. In addition, the Fund's investments in fixed-income securities with longer maturities will fluctuate more in response to interest rate changes.

The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind, because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.

The Fund may invest in stock index futures contracts that provide exposure to the China A-Shares market, including futures contracts listed on the Singapore Exchange on the FTSE China A50 Index. To qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (RIC), the Fund must meet a qualifying income test each taxable year. Failure to comply with the qualifying income test in any taxable year would have significant negative tax consequences to Fund shareholders. If the Internal Revenue Service were to determine that income the Fund derives from these futures contracts did not constitute qualifying income, and if that position were upheld, the Fund would likely be required to reduce its exposure to such investments in order to maintain its qualification as a RIC, which may result in difficulty in implementing its investment strategies.

The Fund is considered non-diversified and may be subject to greater risks than a diversified fund, including increased volatility and that the performance of a relatively small number of issuers may have a greater impact on the Fund's performance.

The Fund's investments in stock index futures contracts will cause it to be deemed to be a commodity pool, thereby subjecting the Fund to regulation under the Commodity Exchange Act and Commodity Futures Trading Commission (CFTC) rules. The Adviser is registered as a Commodity Pool Operator (CPO), and the Fund will be operated in accordance with CFTC rules. Registration as a CPO subjects the registrant to additional laws, regulations and enforcement policies, all of which could increase compliance costs and may affect the operations and financial performance of funds whose adviser is required to register as a CPO. Registration as a commodity pool may have negative effects on the ability of the Fund to engage in its planned investment program.

All rights in the FTSE China A50 Index (the Index) invest in FTSE International Limited (FTSE). FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE under license. The PowerShares China A-Share Portfolio (the Fund) has been developed solely by Invesco PowerShares. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Fund and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by Invesco PowerShares.

 Risk & Other Information

There are risks involved with investing in ETFs, including possible loss of money. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.

Investing in Futures contracts based on the performance of Chinese companies involves risks: China's economy differs, sometimes unfavorably, from the US, in such respects as structure, development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. China's government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership; such actions continue to have a substantial effect on China's economic conditions. Regulatory oversight of Chinese companies differs from that in the US, and may not otherwise deter or uncover fraudulent actions by issuers.

China's A-Shares market is an emerging market with a limited operating history. Various restrictions on the free flow of capital into the China's A-Shares market may adversely impact its liquidity, and increase volatility of A-Shares trading prices. Investment regulations in China are relatively new and the application and interpretation these regulations are relatively untested. There is no certainty as to how they will be applied when the Fund is permitted to invest directly in A-Shares. The Chinese government has taken actions in the past that has benefited A-Shares holders. If A-Shares continue to become more available to foreign investors, the Chinese government may be less likely to take action that would benefit A-Shares holders. Laws, regulations, government policies, political and economic climate in China may change with little or no advance notice. There can be no assurance that the Chinese government will continue to take similar actions in the future. Any such change could adversely affect market conditions for A-Shares.

If the Fund were to invest directly in A-Shares, such investments are subject to pre-approved government limitations on the quantity. If the Adviser obtains a QFII license, it would be required to remit the entire investment principal for its A-Share quota into a local sub-custodian account after obtaining a foreign exchange registration certificate from the Chinese government agency responsible for foreign exchange administration. Once remitted, investment capital only may be repatriated at certain designated times. Therefore, the Fund may be limited in its ability to transfer its investment principal for its A-Share quota, denominated in Renminbi, outside of China. Future changes to the repatriation rules could further limit the Fund's ability to repatriate capital and have a negative effect on its operations.

The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.

If the Fund were to invest directly in A-Shares, the investments and income received will be denominated in Renminbi. The dollar value of foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. Dividends declared by the Fund would be in US dollars and underlying payments received from A-Shares would be made in Renminbi, fluctuations in exchange rates may adversely affect the dividends that the Fund would pay.

The investment techniques and risk analysis used by the portfolio managers may not produce the desired results.

Risks of futures contracts include: an imperfect correlation between the value of the futures contract and the underlying commodity; possible lack of a liquid secondary market; inability to close a futures contract when desired; losses due to unanticipated market movements; obligation for the Fund to make daily cash payments to maintain its required margin; failure to close a position may result in the Fund receiving an illiquid commodity; and unfavorable execution prices.

An investment in exchange-traded funds (ETFs) may trade at a discount to net asset value, fail to develop an active trading market, halt trading on the listing exchange, fail to track the referenced index, or hold troubled securities. ETFs may involve duplication of management fees and certain other expenses. Certain of the ETFs the fund invests in are leveraged, which can magnify any losses on those investments. The Fund does not intend to use leverage.

Obligations issued by US Government agencies and instrumentalities may receive varying levels of support from the government, which could affect the fund's ability to recover should they default. Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Due to anticipated Federal Reserve Board policy changes, there is a risk that interest rates will rise in the near future.

The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.

The Fund may hold illiquid securities that it may be unable to sell at the preferred time or price and could lose its entire investment in such securities.

The Fund's investments in futures contracts will cause it to be deemed to be a commodity pool, subjecting it to regulation under the Commodity Exchange Act and Commodity Futures Trading Commission (CFTC) rules. The Adviser, a registered Commodity Pool Operator (CPO), and the Fund will be operated in accordance with CFTC rules. Registration as a CPO subjects the registrant to additional laws, regulations and enforcement policies; all of which could increase compliance costs, affect the operations and financial performance of funds whose adviser registered as a CPO. Registration as a commodity pool may have negative effects on the ability of the Fund to engage in its planned investment program.

To qualify as a regulated investment company (“RIC”), the Fund must meet a qualifying income test each taxable year. Failure to comply with the test would have significant negative tax consequences for shareholders. The Fund believes that income from futures should be treated as qualifying income for purposes of this test, thus qualifying the Fund as a RIC. If the IRS were to determine that the Fund's income is derived from the futures did not constitute qualifying income, the Fund likely would be required to reduce its exposure to such investments in order to maintain its RIC status.

During periods of reduced market volatility or in the absence of readily available market quotations for the holdings of the Fund, the Funds' ability to value its holdings becomes more difficult and the judgment of the Sub-Adviser may play a greater role in the valuation of the Fund's holdings due to reduced availability of reliable objective pricing data.

The Fund is non-diversified and may experience greater volatility than a more diversified investment.

The FTSE China A50 Index is a real-time index that provides exposure to the largest 50 A-Share companies on a market-cap weighted basis.

All rights in the FTSE China A50 Index (the Index) invest in FTSE International Limited (FTSE). FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE under license. The PowerShares China A-Share Portfolio (the Fund) has been developed solely by Invesco PowerShares. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Fund and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by Invesco PowerShares.

as of 08/04/2015
12:30 PM EST

CHNA
Intraday Stats

  • Last Trade $38.55
  • Current IIV $38.55
  • Change $1.45
  • % Change 3.91%
as of 08/03/2015
  • NAV at market close $37.44
as of 08/03/2015

Fund Yield

  • SEC 30 Day Yield -0.46%
  • 30-Day SEC Unsubsidized Yield
    as of 08/03/2015
    -0.50%
as of 08/03/2015

Prior Close

  • Closing Price $37.10
  • Bid/Ask Midpoint $37.23
  • Bid/Ask Prem/Disc -$0.21
  • Bid/Ask Prem/Disc -0.56%

Fund Details

  • Fund Ticker CHNA
  • CUSIP # 73935B888
  • ISIN US73935B8880
  • Intraday NAV CHNAIV
  • Benchmark Index Ticker XIN9I
  • Management Fee 0.50%
  • Acquired Fund Fees & Expenses 0.07%
  • Total Expense Ratio 0.57%
  • Fee Waiver 0.07%
  • Net Expense Ratio 0.50%
  • Marginable Yes
  • Short Selling Yes
  • Options No
  • Exchange NYSE Arca
  • Inception Date 10/10/2013
  • # of Holdings 8
    as of 08/03/2015
as of 08/04/2015

Quick Facts

  • Previous Close $37.10
  • Open $38.13
  • Today's High $38.55
  • Today's Low $38.13
  • Today's Volume 8,039
  • 52 Week High $52.87
  • 52 Week Low $23.69
  • Shares Outstanding .20MM
  • Market Value $7.5MM