Chinese households possess a huge spending capacity. From 2010 to 2017, the retail sales of consumer goods in China accumulated from 158 bn RMB (22.7 bn USD) to more than 366 bn RMB (52.7 bn USD) – revealing a Compound Annual Growth Rate of 11 percent p.a. over the last eight years. Targeted at investors who seek the ability to participate in this flourishing trend, Solactive released its new Solactive China Consumer Index (.SOLCHCN), which serves as the underlying of Deutsche Bank’s Solactive China Consumer Index Certificate (DE000DS9CHC2).
Solactive’s index intends to track the price movements of the 20 largest Chinese companies by market capitalization, which are classified in any of the three following business segments: Consumer Services, Consumer Durables, and Consumer Non-Durables. Furthermore, eligible companies have to derive more than 75 percent of their revenues from China, a factor that ensures investors obtain a direct exposure in the Chinese domestic market.
Timo Pfeiffer, Head of Research at Solactive, commented:
China’s demographics present a huge opportunity for steady, and long-term investment strategy. As more Chinese citizens raise their living standards, the purchasing power of domestic households more than doubled within the last eight years. Alongside a growing middle-class, which forms the backbone of every country’s economy, China’s consumption power is expected to experience further increases.
Mathias Schoelzel, Head of X-markets at Deutsche Bank, added:
The Chinese consumer sector is one of the sectors with a strong growth potential. With our new index tracker, we offer the opportunity to participate in a selection of the largest Chinese companies. We regard the Solactive China Consumer Index as a great addition to our existing index universe.
The index universe consists of all Hong Kong-listed equities and American Depositary Receipts (“ADRs”). For the determination of the revenues, data provided by the FactSet GeoRev database is utilized. Current index components are for example Alibaba Group Holding Ltd, BYD Co Ltd, Pinduoduo Inc., and JD.com Inc.