South African investors just got a new way to access the world’s second-largest economy. The Prescient China Balanced Feeder Actively Managed ETF listed on the JSE on 11 March 2026, trading under the code PANDA. It’s the first China-focused AMETF on the exchange.
The ETF is structured as a feeder fund into the Prescient China Balanced Fund, an Irish-domiciled UCITS fund under Prescient Global Funds plc. That underlying fund invests predominantly in mainland Chinese equities, bonds, cash and money market instruments, and it does so using something most SA asset managers can’t claim: a QFII license.
What’s a QFII licence and why does it matter?
QFII stands for Qualified Foreign Institutional Investor. It’s a license issued by the China Securities Regulatory Commission that allows direct access to the Shanghai and Shenzhen stock exchanges, the inter-bank bond market, and futures markets. Without it, foreign investors are limited to offshore-listed Chinese shares (like those on the Hong Kong exchange) or synthetic products.
Prescient was the first African institution to receive a QFII license, back in September 2012. They raised $50 million as their first tranche into China and launched the underlying China Balanced Fund in April 2013. That history matters, this isn’t a manager who jumped on the China bandwagon last year. They’ve been running money in mainland China for over a decade.
The China operation is headed by Liang Du, who was born in Shanghai, immigrated to South Africa via Zaire in 1990, studied actuarial science and an MBA at UCT, and has been with Prescient for close to 20 years.
How the fund works
The fund uses a 4-factor quantitative model designed to exploit behavioural biases among Chinese retail investors. Those four factors are:
Value: Chinese investors tend to chase growth stories and ignore cheaper stocks. The fund buys stocks trading below their sector average.
Quality: High-ROE stocks are often overlooked in China because consistent profit generation is considered boring. Over time, these stocks outperform.
Behaviour: The Chinese market is dominated by retail investors who overreact to news. When a stock drops sharply on small volumes, the fund buys on the assumption that the overreaction will fade.
Volatility: The average holding period for Chinese retail investors is less than two weeks. They prefer volatile stocks, which means low-volatility stocks are systematically under priced.
It’s a flexible mandate and the fund can shift between 0% and 100% in any asset class, which means it can go defensive when needed. As at January 2026, the allocation was roughly 65% equities, 20% cash, and 15% bonds. Currency exposure is almost entirely in Chinese yuan (98%).
The holdings
The top holdings read like a who’s who of China’s industrial backbone: Contemporary Amperex Technology (CATL, the world’s largest EV battery maker), Kweichow Moutai (the country’s iconic liquor brand), Zhongji Innolight, Ping An Insurance, and Zijin Mining. The top 10 holdings make up about 22% of the equity allocation, so it’s reasonably diversified.
Sector exposure is led by information technology (24%), financials (21%), and industrials (15%).
On fees, the unit trust management fee is 0.50% (including VAT), with no performance fee. The total investment charge comes to 1.69%.
Why China, and why now?
For SA investors, the case for China exposure isn’t just about chasing returns, it’s about diversification. China’s economy doesn’t move in lockstep with the US or Europe, and the JSE’s heavy weighting to resources and financials means most local portfolios have very little meaningful exposure to the world’s manufacturing powerhouse.
China has also had a rough few years. The property sector meltdown, regulatory crackdowns on tech, geopolitical tensions with the US, and sluggish consumer confidence battered Chinese equities. The MSCI China Index is still well below its 2021 peaks. Valuations have compressed significantly, and the Chinese government has been rolling out stimulus measures to support growth.
Then there’s the AI factor. The emergence of DeepSeek, a Chinese AI model that stunned global markets in early 2025 by delivering competitive performance at a fraction of the cost of Western alternatives. The launch sparked a major re-rating of Chinese tech stocks. The Hang Seng Tech Index rallied hard, and the narrative around Chinese innovation shifted from “copycat” to “competitor.”
Of course, the risks are real. Geopolitical tensions aren’t going away. The property sector is still fragile. Regulatory unpredictability remains a feature, not a bug, of investing in China. And a 20% standard deviation means you’ll need to stomach some serious short-term volatility.
Does this fill a gap?
It does. Until now, SA investors wanting China-specific exposure through a listed product on the JSE had limited options. There are two passive ETFs tracking China as below and it is included in most emerging market ETFs;
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
