ETF Trends
ETF Trends

ETF spotlight on Guggenheim China Real Estate (NYSEArca: TAO), part of an ongoing series.

Assets: $22.7 million.

Objective: The Guggenheim China Real Estate ETF tries to reflect the performance of the AlphaShares China Real Estate Index, which holds securities of Chinese publicly-traded companies and real estate investment trusts that generate their revenues from real estate development.

Holdings: Top holdings include: The Link REIT 7.72%, China Overseas Land & Inv 5.62%, Cheung Kong Holdings Ltd. 5.60%, Swire Pacific Ltd. 5.35% and Sun Hung Kai Properties 5.23%.

What You Should Know:

  • Guggenheim Investments sponsors the fund.
  • TAO has an expense ratio of 0.65%.
  • The fund has a 12-month yield of 1.12%.
  • The ETF is up 1.44% over the last month, down 24.09% over the past three months and down 25.58% year-to-date.
  • TAO holds 75.57% of its portfolio in Hong Kong assets and 24.43% in China assets.
  • While the fund holds a significant portion of its weighting Hong Kong allocations, many Hong Kong firms operate on the mainland. As such, the Hong Kong holdings may have a high correlation to movements in mainland China assets.
  • Currently, the markets are bracing for China’s “hard” or “soft” landing. Depending on the outcome, the fund may experience a tough road ahead. [China ETFs Rise on Manufacturing Data]

The Latest News:

  • TAO was up more than 3% on Monday following upbeat manufacturing data from China.
  • The Chinese government is taking a stronger hand in stabilizing the real-estate market, WSJ.com reports.
  • The government will be stepping up its evaluation of city and county authorities on their efforts to control housing prices and monitor quality control in subsidized housing.
  • In September, China’s housing prices remained relatively unchanged month-over-month and even slowed year-to-date, which indicates that Beijing’s real estate regulations are having an impact.

Guggenheim China Real Estate

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.