ETF Spotlight: First Trust ISE Chindia (FNI)

ETF Spotlight on First Trust ISE Chindia (NYSEArca: FNI), part of a weekly series.

Assets: $147.4 million

Objective: Tracks the ISE Chindia Index, a non-market cap weighted index of 50 ADRs or stocks of companies domiciled in either China or India.

Holdings: Top names include Infosys Technologies (NASDAQ: INFY), PetroChina (NYSE: PTR), Baidu, Inc. (NASDAQ: BIDU) and Tata Motors (NYSE: TTM).

What You Should Know

  • China is the bigger country in FNI, with 60.4% of the total weight; India accounts for 39%.
  • Information technology and financials are the biggest sectors in this ETF, with 29.4% and 22.7% of the weighting, respectively
  • Other sectors include telecommunications (10.9%), energy (11.8%) and industrials (9.8%)
  • Has an expense ratio of 0.60%, making it one of the cheaper ETFs to cover China or India
  • FNI is up 19.8% in the last three months, riding a wave of interest in emerging markets these days

The Latest News

  • The Economist points out that there are opportunities for greater cooperation between the two economies, given their economic strengths (manufacturing in China and services in India). Two-way trade is thriving – it will be more than $60 billion this year, up from $270 million just 20 years ago.
  • India’s exports grew by 22.5% in August from a year ago, while imports rose 32.2%, widening the trade deficit. Although this poses a threat, it’s expected that the economy will hold up.
  • India’s economy is forecast to expand 8.5% this year, and some economists believe that India will grow faster than any other large country over the next 25 years.
  • A stronger Chinese currency could help China’s citizens consume more, raise the country’s standard of living and help the rest of the globe produce more.
  • China’s economy expanded 11.1 % in the first half of 2010, from a year earlier, and is likely to grow more than 9% for the whole year.

China ETFs, India ETFs

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