HSBC MSCI CHINA A UCITS ETF USD HEDGED A

Issuer: HSBC

Asset Class: Equity

TER: 35bps

Trading Currency: USD

Pays Income: False

Listing Date: 30 May 2025

Ticker: HCAU

ISIN: IE0007HPIXG8

This fund offers targeted exposure to the Chinese A-share market, which comprises companies listed on the Shanghai and Shenzhen stock exchanges. It aims to replicate the performance of the MSCI China A Inclusion Index, providing a comprehensive representation of the large and mid-capitalization segments of the domestic Chinese equity market. By investing directly in these securities through a physical replication method, the fund allows for a pure-play investment into companies that are closely tied to the internal growth dynamics of China's economy, driven by its vast consumer base and ongoing structural reforms.

A key feature of this specific share class is its currency-hedging strategy. It is designed to mitigate the impact of exchange rate fluctuations between the Chinese Yuan (CNY), the denomination of the underlying assets, and the US dollar. This is particularly advantageous for investors who wish to isolate their returns to the performance of the Chinese equities themselves, without taking on the additional risk associated with foreign exchange volatility. The hedging mechanism helps to provide a more direct correlation to the asset performance, making it a more predictable investment from an equity-centric perspective.

Incorporating this instrument into a portfolio can serve as a strategic allocation to the world's second-largest economy while actively managing currency risk. It is suitable for those seeking to diversify beyond developed markets and gain access to the long-term growth potential of China's domestic companies. The accumulating share class structure means that any dividends received from the underlying holdings are automatically reinvested back into the fund, fostering the potential for compounded growth over the long term.