BlackRock’s iShares launched an emerging market exchange traded fund that specifically excludes China to allow investors better control their Chinese equity exposure as the Asian market continues to grow in size.
On Thursday, BlackRock rolled out the iShares MSCI Emerging Markets ex-China ETF (NasdaqGM:EMXC). EMXC has a 0.49% expense ratio.
“China’s representation in the MSCI Emerging Market index has increased significantly over the last 10 years – from 8% in 2006 to close to 28% of the index today – and is expected to grow further following MSCI’s recent decision to add China A-shares,” Tushar Yadava, iShares Investment Strategist, said in a note. “While this reflects China’s impressive growth and undoubted importance on the global stage, EMXC is designed for those investors that may prefer to allocate to China on a more precise and individual basis, or indeed exclude it altogether.”
The MSCI Emerging Markets ex-China ETF tries to reflect the performance of an index of large- and mid-sized companies across 22 emerging market countries, excluding China. Developing markets may include Brazil, Chile, Colombia, the Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Peru, the Philippines, Poland, Qatar, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and the United Arab Emirates.
EMXC will be competing against the EGShares EM Core ex-China ETF (NYSEArca:XCEM), which has a 0.35% expense ratio and $9.6 million in assets under management.
To better manage their emerging market exposure, investors may choose to pare EMXC with a China country-specific ETF.
Investors interested in accessing China’s markets have a number of options available. For instance, the iShares China Large-Cap ETF (NYSEArca:FXI) and SPDR S&P China ETF (NYSEArca:GXC) track Chinese companies listed on the Hong Kong stock exchange.
Investors can access Chinese markets directly through options like the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: CNXT), VanEck Vectors ChinaAMC CSI 300 ETF (NYSEArca: PEK), iShares MSCI China A ETF (BATS: CNYA) and db X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR).
For more information on new fund products, visit our new ETFs category.