Comparing China’s ETFs – Which One is Right for You?

January 22, 2009 at 2:00 pm by Max Chen      Bookmark and Share

ETF ChinaPicking the right exchange traded fund (ETF) for China can be difficult but not impossible. So which one is right for you? That’s a matter of what you’re looking for.

In the end, it all comes down to what kind of diversity you’d like, how the allocation is spread out among individual companies, what sectors you’d like exposure to, expenses and performance. Do you want indirect exposure? Or do you want some bigger exposure to China’s financials? It’s up to you – just look under the hood.

These are the four major ETFs tracking China that are available:

PowerShares Golden Dragon Halter USX China (PGJ): Currently has total assets of $204.5 million, 102 holdings, and and expense ratio of .60%. This fund seeks to replicate, before fees and expenses, the Halter USX China Index, which is made up of U.S.-listed securities of companies that derive a majority of their revenue from the People’s Republic of China.

Sector allocation for the fund: consumer discretionary, 8.5%; consumer staples, 1.9%; energy, 18.7%; financials, 5.9%; health care, 5.3%; industrials, 12.1%; information technology, 23.1%; materials, 7%; telecom services, 12.8%; utilities 4.7%.

China ETFs

iShares FTSE/Xinhua China 25 Index (FXI): Has total assets of $29.3 billion, 50 holdings and an expense ratio of .74%. FXI tracks the underlying index FTSE/Xinhua China A50 Index, which provides investment results that correspond generally to the performance, before fees and expenses, of publicly traded securities, A-shares, in the Chinese market.

Sector allocation for the fund: banks, 31.6%; life insurance, 9.9%; electricity, 7.8%; industrial metals, 6.7%; general financial, 6.4%; industrial transporation, 5.5%; oil & gas producers, 5.2%; construction & materials, 4.9%; real estate, 4.4%; mining, 4%; beverages, 3.9%; mobile telecom, 3%; general retailers, 2.61%; other 4.2%

China ETF

SPDR S&P China (GXC): Has total assets of $127.9 million, 124 holdings and an expense ratio of 0.6%. The ETF seeks to match the returns and characteristics of the total return performance of the S&P China BMI Index. The S&P China BMI Index is a market capitalization weighted index that defines and measures investable publicly-traded companies located in China, but available to foreign investors. The China Index is “float adjusted.”

Sector allocation for the fund: financials, 31.7%; telecom services, 19.2%; energy, 18.4%; industrials, 9.1%; information technology, 6.2%; materials, 4.7%; consumer discretionary, 4.3%; consumer staples, 3.4%; utilities, 2.9%; health care, 0.30%

China ETFs

NETS Hang Seng China Enterprises Index (SNO): Total net assets are $1.3 million, 43 holdings and an expense ratio of 0.51%. SNO mainly corresponds to the performance of H-Shares of Chinese enterprises traded primarily on the Stock Exchange of Hong Kong, which are weighted according to a free-float adjusted, market-capitalization weighted methodology. It has a reported 15% cap on stock weights.

Sector allocation for the fund: financials, 55.4%; energy, 22%; properties & construction, 7.5%; materials, 4.5%; services, 3.7%; telecom, 3.4%; utilities, 1.9%; consumer goods, 0.9%; industrial goods, 0.80%.

China ETFs

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