Capital ICE 7+ Year China Policy Bank Exchange Traded Fund (00794B)

Overview

The Capital ICE 7+ Year China Policy Bank Exchange Traded Fund (ETF) is a unique investment vehicle focusing on the Chinese bond market, specifically targeting long-term policy bank bonds with maturities of over seven years. This ETF is designed to offer investors strategic access to a niche segment of China's bond market, enabling them to benefit from the substantial issuance volumes and high liquidity characteristic of the policy bank bonds. By tracking the ICE 7+ Year China Large Policy Bank Index through a passive management approach, the fund aims to mirror the index's performance, adjusting for fees and expenses. The fund's portfolio is primarily composed of bonds issued by China's major policy banks, including the notable Agricultural Development Bank of China, which underscores the sovereign-backed credit quality inherent in its holdings. Serving a critical role in the financial market, this ETF provides a gateway for investors to diversify their portfolios by incorporating emerging Asia-Pacific fixed income assets, with a particular emphasis on the evolving landscape of Chinese debt. Additionally, the fund is appealing for regional investors due to its income distribution on a quarterly basis and its denomination in New Taiwan Dollars, facilitating access to Mainland China’s bond market through Taiwan's regulated financial system.

Products and Services

The Capital ICE 7+ Year China Policy Bank Exchange Traded Fund offers specialized products and services tailored for investors interested in the Chinese market:

• Long-term Policy Bank Bonds

This product primarily focuses on investing in bonds issued by China's key policy banks, with maturities extending beyond seven years. These bonds are selected for their high liquidity and significant emission volume, presenting an attractive investment opportunity in the sovereign-backed sector of the Chinese bond market.

• ICE 7+ Year China Large Policy Bank Index Tracking

Employing a passive management strategy, the ETF aims to replicate the performance of the ICE 7+ Year China Large Policy Bank Index. This approach ensures that investors can gain exposure to a broad array of policy bank bonds, matching the index’s yield and performance characteristics after accounting for the fund's fees and expenses.

• Quarterly Income Distribution

Designed to provide regular income, the ETF distributes dividends to its holders on a quarterly basis. This feature makes it an appealing option for investors looking for steady income streams in addition to potential capital appreciation offered through exposure to the Chinese bond market.

• New Taiwan Dollar Denomination

With its denomination in New Taiwan Dollars, the ETF provides a unique avenue for regional investors to participate in Mainland China’s bond market without the direct currency risk associated with yuan investments. This aspect is particularly beneficial for investors in Taiwan and the surrounding areas, looking to diversify their portfolios while minimizing exchange rate volatility.