“WisdomTree’s China ex-State-Owned Enterprises Fund (CXSE) provides access to China’s private sector and higher growth potential while limiting exposure to SOEs. We believe governments may not always be the best stewards of capital and government-owned companies might be influenced by a broader set of interests, beyond generating profits for shareholders,” said Jeremy Schwartz, WisdomTree Director of Research, in a statement.
CXSE is not WisdomTree’s first foray into emerging markets ETFs that explicitly steer clear of state-owned enterprises. In December, the issuer introduced the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (NYSEArca: XSOE). True to its name, the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund excludes state-run oil giants such as Petrobras (NYSE: PBR) and Russian oil companies.
By excluding state-controlled firms, the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund ratchets up exposure to the emerging markets consumer story, although the new ETF is a not a dedicated consumer fund. For example, XSOE’s combined weight to the technology consumer discretionary and staples sectors, three of the fund’s top four sector weights, is 50%. [This ETF Excludes State-Run Companies]
XSOE offers exposure to 19 emerging markets, but China is the ETF’s largest geographic weight at almost 17.1%.
ETF Trends editorial team contributed to this post.