For instance, Guggenhiem China Small Cap ETF (NYSEArca: HAO), iShares MSCI China Small Cap Index Fund (NYSEArca: ECNS) and db X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (NYSEArca: ASHS) all include heavy positions in industrial and consumer sectors. In contrast, most large-cap China ETFs have a heavy tilt toward state-backed companies and the financial sector, with FXI showing a 53.1% position to financials. [A-Shares ETFs Could be China Value Plays]
“[HAO] provides better exposure to sectors that will benefit from growth in domestic consumption relative to a broad-market China exchange-traded fund,” according to Morningstar analyst Patricia Oey.
HAO includes 19.8% in industrials, 14.9% in consumer discretionary and 7.4% in consumer staples. ECNS allocates 19.0% to consumer discretionary and 16.4% to industrials. Additionally, ASHS’s top holdings include industrials 28.8%, materials 18.9%, energy 14.3% and consumer discretionary 13.6%.
The new ASHS is the fifth A-shares ETF to list in the U.S. and the fourth to offer physical access to A-shares, with a focus on small-cap Chinese equities. The ETF allows investors to track Chinese companies listed on Shanghai or Shenzhen exchanges, as opposed to other China-related ETFs that track U.S. and Hong Kong listed Chinese stocks. [New ETF Grants Access to A-Shares Small-Caps]
For more information on China, visit our China category.
Max Chen contributed to this article.