“The XCEM fund is a strong fit for investors who are looking to be more conservative in their approach to China without sacrificing opportunities in other emerging markets,” EGA Managing Director Jay McAndrew said in the press release. “It also addresses the needs of investors who have a point of view on China and are looking for greater control over the size and style of their exposure to this market.”
The China exposure may be a greater concern once major indices fully adopt mainland A-shares exposure. Currently, the MSCI Emerging Markets Index holds about 25% China exposure through H-shares, or Chinese stocks traded on the Hong Kong Exchange, but full China exposure could rise to 44% with A-shares inclusion, according to Emerging Global Advisors. Additionally, the FTSE Emerging Index holds about 28% China but could increase its exposure to 40% China with A-shares inclusion.
Consequently, in a diversified portfolio, investors may choose their China exposure with a country-specific ETF while still holding onto a broad emerging market position through XCEM.
For more information on new fund products, visit our new ETFs category.
Money managers who are looking into constructing their own ETFs may also be interested in attending the second annual ETF Boot Camp in New York later this month. Whether you’re an ETF start-up, fund company, broker dealer, pension plan, endowment, private equity firm, fund board independent director, 401k plan provider or ETF industry executive…this conference is designed for you. This one-of-a-kind event will condense everything you need to know about the inner workings of the ETF business into two days.
Max Chen contributed to this article.