Today we take a deeper dive into China equity based ETFs after taking notice of the recent impressive rally throughout the Chinese equity market in the past several weeks.
While we spoke about broad based China equity funds yesterday like FXI (iShares China Large-Cap, Expense Ratio 0.72%) and MCHI (iShares MSCI China, Expense Ratio 0.61%) for instance, today we look at a specific sector that has been driving much of this performance.
Unlike the case in the U.S. equity market, the Technology sector has turned in a very strong 2013 in terms of performance thus far in comparison to broad market proxies. [Technology Sector is Silver Lining in Emerging Market ETFs]
Two particular ETFs stand out here, CQQQ (Guggenheim China Technology, Expense Ratio 0.70%) and QQQC (Global X China Technology, Expense Ratio 0.65%) which have led the charge and are impressively out-performing both year to date and in the trailing one year period.
Neither ETF seems to be very well-known or well utilized by institutional managers, as CQQQ only has $22 million in assets to QQQC’s $3.7 million.
Trading volumes in both products are also rather weak on a daily measured basis. Another beneficiary of the fierce rally in Chinese based technology companies for the past year is PGJ (PowerShares Golden Dragon China Portfolio, Expense Ratio 0.60%), which at the moment is the best performing China based equity ETF in the entire landscape YTD. [China ETF Trounces Rivals]
This particular ETF has a heavy dose of Technology exposure in the underlying index, with Tech making up 48.84% of the holdings currently including rather well-known names such as BIDU, CTRP, NTES, CHL, and SINA to name a few.
PowerShares Golden Dragon China Portfolio
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.
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