In spite of recent headwinds in the Emerging Markets space (primarily weakness in Brazil), the largest and most well-known China Equity related fund FXI (iShares FTSE China Large-Cap, Expense Ratio 0.74%) has pulled in assets recently (+$200 million), vaulting this fund over the $6 billion mark in overall assets under management.
Year to date the fund has been punished in terms of redemption activity, net losing about $2.2 billion year to date despite positive performance in the past quarter. FXI’s largest exposures are the following: 1) China Mobile Ltd. (10.60%), 2) China Construction Bank Corp H Shares (8.96%), and 3) Industrial and Commercial Bank of China H Shares (7.66%) and the fund is rather heavily weighted toward the Financial Services sector (52.31%), which has certainly helped positive performance this year.
Other important funds to monitor in the China equity space are EWH (iShares MSCI Hong Kong, Expense Ratio 0.52%), MCHI (iShares MSCI China, Expense Ratio 0.61%), GXC (SPDR S&P China, Expense Ratio 0.59%), PGJ (PowerShares Golden Dragon Halter USX China Portfolio, Expense Ratio 0.60%). MCHI and PGJ have had positive asset inflows year to date, while GXC considering the size of the fund, has seen a considerable level of assets leave the fund this year (-$239 million).
The aforementioned funds are the largest in the China equity space in terms of assets, but there are also thirteen other long only, un-leveraged China focused equity ETFs on the market currently. ASHR (db X-trackers Harvest CSI 300 China A-Shares Fund, Expense Ratio 1.08%) deserves a special mention because the fund just launched about a month ago, and it has already attracted more than $170 million in assets.
KraneShares also comes to mind as a newer entrant to the ETF space via China, with KFYP (KraneShares CSI China Five Year Plan, Expense Ratio 0.68%) and KWEB (KraneShares CSI China Internet, Expense Ratio 0.68%) both debuting in July of this year.
Two other potentially timely ETFs right now are the memorably named YINN (Direxion Daily China Bull 3X Shares, Expense Ratio 0.95%) and YANG (Direxion Daily China Bear 3X Shares, Expense Ratio 0.95%) which have been reasonably popular for aggressive short term speculative traders as well as aggressive hedgers.
iShares China Large-Cap ETF
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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