Investors looking for an alternative index approach to Hong Kong ETFs can consider the First Trust Hong Kong AlphaDEX Fund (NYSEArca: FHK). Although FHK is not a cap-weighted fund, it is still heavy on financial services names with a 52.5% weight to that sector.

That is high concentration to just one sector, but FHK is reflective of the discounts available on Hong Kong with a P/E below 10 and a price-to-book ratio of just 0.98, according to First Trust data.

FHK is up 3.6% in the past month and touched a new all-time high on Thursday. A significant chunk of FKH’s financial services exposure goes to property developers, a group that has been controversial in Hong Kong and China. Still, those stocks, several of which are found among FKH’s top-10 holdings, are soaring “as local governments ease home-purchasing restrictions to boost sales, and fears of a wave of defaults among the country’s heavily indebted corporate sector have failed to materialize,” according to the Journal. [Hong Kong Highs for This ETF]

FHK holds 40 stocks and has $3.9 million in assets under management. It charges 0.8% per year compared to 0.47% by EWH.

iShares MSCI Hong Kong ETF

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