It is hard to believe that the largest China equity based ETF, FXI (iShares China Large Cap, Expense Ratio 0.74%), has a $50 handle this morning, marking a >18.4% rally in the three month trailing period there.
We pointed out a temporary slide in China on March 4th in our “ETF Chart of The Day” piece, followed up with a March 5th piece on BABA in the context of China equity based ETFs. Perhaps a tell of the weakness in China being brief was the lack of redemption flows we noted in FXI at that point of time year to date, as no one could make the case that anyone was necessarily running for the exits.
FXI remains the largest U.S. listed China Equity focused ETF with more than $6.3 billion in assets under management, with the next mainland China based ETF MCHI (iShares MSCI China, Expense Ratio 0.61%) holding just north of $2 billion in assets currently.
EWH (iShares MSCI Hong Kong, Expense Ratio 0.49%) also has some heft, as well as tenure in the space having debuted way back in early 1996, with about $2.9 billion in AUM. MCHI has actually pulled in >$562 million in year to date assets while EWH has attracted a more modest amount ($84 million in).
Back on March 5th we pointed out two leveraged products for traders and portfolio managers whom are looking to potentially put on and take off hedges against their exposures to China’s equity market, and both funds have seen a tremendous pick up in trading activity in just a few short weeks.
YINN (Direxion Daily China Bull 3X, Expense Ratio 0.95%) and YANG (Direxion Daily China Bear 3X, Expense Ratio 0.95%) in the past few days alone have seen huge upticks in volume in comparison to normal levels, and although fund flows remain flattish for both funds, we would expect that to change sharply in the short term due to the huge increase in interest in both funds.
For example, YANG which usually trades about 137,000 shares on an average daily basis, has already eclipsed 1 million shares traded today alone, following a 1.5 million share day yesterday. YINN traded more than 500,000 shares yesterday in comparison to its ADV of about 169,000 shares.
Direxion Daily FTSE China Bear 3X Shares
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