Bolstered by a string of strong economic reports, ETFs tracking China have rallied in recent weeks. Predictably, that has put the spotlight on the iShares China Large-Cap ETF (NYSEArca: FXI). FXI, the largest and most heavily traded China ETF, has delivered with a surge of about 19.2% since July 1.

Other China ETFs have participated in that upside, too. With the world’s second-largest economy looking steady and stocks there still considered cheap compared to the broader emerging markets arena, investors may want to evaluate other China funds in addition to FXI. That list should include the First Trust China AlphaDEX Fund (NYSEArca: FCA).

FXI is frequently criticized for its substantial allocations to the financial services sector and state-controlled companies. The ETF is also criticized for holding just 27 stocks, a number that many investors think is far from accurately reflective of the massive and diverse Chinese economy. [China ETFs With a More Diversified Approach]

FCA takes a noticeably different approach to Chinese stocks. Finacials are the ETF’s largest sector, but the allocation is just 17% compared to almost 53% for FXI. Importantly, FCA follows the framework used by First Trust’s successful AlphaDEX sector ETFs, a lineup that includes the $610.5 million First Trust Consumer Staples AlphaDEX Fund (NYSEArca: FXG) and the $330.9 million First Trust Technology AlphaDEX Fund (NYSEArca: FXL). [Chart of the Day: AlphaDEX Methodlogy]

The AlphaDEX methodology includes a focus “on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets,” according to First Trust.

This creates palpable, though potentially advantageous differences for FCA compared to rival China ETFs. For example, FCA’s 50 holding have a median market cap of $4.5 billion compared to $17.65 billion for FXI. That means FCA is not only significantly less exposed to state-controlled companies than cap-weighted China ETFs, but the First Trust offering also gives investors more exposure to stocks with better medium-term upside due to the AlphaDEX screening methodology.

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