KraneShares, a New-York based China-focused ETF issuer, has launched the KraneShares CCBS China Corporate High Yield Bond USD Index ETF (KCCB US). Listed on NYSE Arca, the fund provides exposure to US dollar-denominated high-yield debt issued by Chinese companies.

The fund tracks a basket of non-investment grade bonds issued by Chinese companies.

KCCB tracks the Solactive USD China Corporate High Yield Bond Index which includes non-investment grade bonds from firms domiciled in Mainland China or companies that operate primarily in China or Hong Kong.

Eligible securities must have a remaining maturity between two and five years, a par value of at least $300 million, and be issued by firms with more than $1 billion in debt outstanding. Constituents are weighted by value outstanding subject to a 5% issue cap.

The ETF has an expense ratio of 0.69%.

The US dollar China corporate high-yield bond market has grown considerably in recent years. Since 2014, China has accounted for more than half of all new annual USD bond issuance across Asia. Issuance more than doubled in terms of the number of bonds and in value from 2016 to 2017, and, by the end of May 2018, the entire USD China corporate high-yield bond market reached $153 bn in market cap with over 122 companies issues debt.

It is the second fixed income ETF within KraneShares’ line-up of China-themed products following the 2014 launch of the KraneShares E Fund China Commercial Paper ETF (KCNY US).

KCNY tracks the CSI Diversified High Grade Commercial Paper Index which is composed of investment grade commercial paper denominated in renminbi issued by sovereign, quasi-sovereign and corporate issuers and traded in the inter-bank bond market. Commercial paper in the index has a remaining term to maturity of no more than one year and no less than one month. This fund charges an expense ratio of 0.57%.