WisdomTree (NasdaqGS: WETF), the fifth-largest U.S. issuer of exchange traded funds, said today it has converted the WisdomTree China Dividend Ex-Financials Fund (NasdaqGM: CHXF) to the WisdomTree China ex-State-Owned Enterprises Fund (NasdaqGM: CXSE).
The newly converted ETF tracks the WisdomTree China ex-State-Owned Enterprises Index (CHXSOE), which tracks Chinese companies that are not state-controlled. State owned enterprises are defined as government ownership of more than 20% of outstanding shares of companies, according to WisdomTree.
By eliminating exposure to China’s state-run companies, the CXSE features scant exposure to banks and energy stocks. In fact, the WisdomTree China ex-State-Owned Enterprises Index has a weight to banks of just 3.5% and no energy exposure, according to issuer data.
Rather, the newly converted ETF is heavy on technology and consumer discretionary names. Software and services names account for almost 28% of the WisdomTree China ex-State-Owned Enterprises Index with retailers and apparel stocks combining for over 15%. [China Internet ETF Staves Off Alibaba Slump]
CXSE’s underlying index is home to an array of U.S.-listed Chinese Internet darlings, including Alibaba (NYSE: BABA), Baidu (NasdaqGS: BIDU), JD.com (NasdaqGS: JD) and Ctrip.com (NasdaqGS: CTRP).