A combination of market volatility in U.S. equities and an impending U.S.-China trade deal signals a perfect time for investors to obtain emerging markets exposure via the largest EM economy and the second largest in the world through China. As such, it’s also an opportune time for Global X Funds, the New York-based provider of exchange-traded funds (ETFs), to announce the launch of six China-focused ETFs on the New York Stock Exchange, including five China Sector ETFs and one large-cap ETF.
The sector launches will join Global X’s existing suite of six China Sector ETFs, resulting in a full offering that corresponds with each of the eleven major economic sectors identified by the Global Industry Classification Standard (GICS®). The suite will offer investors the first way to comprehensively access and evaluate the country’s sectors in the liquid and transparent US ETF structure.
While emerging markets ETFs, including China ETFs, have been feeling the negative ripple effects of trade wars, it presents an ideal opportunity for a value investor who would stand to benefit if a U.S.-China trade comes into fruition soon.
The five sector funds launching today are:
- The Global X MSCI China Consumer Staples ETF (CHIS)
- The Global X MSCI China Health Care ETF (CHIH)
- The Global X MSCI China Information Technology ETF (CHIK)
- The Global X MSCI China Real Estate ETF (CHIR)
- The Global X MSCI China Utilities ETF (CHIU)
Global X is also launching the Global X MSCI China Large-Cap 50 ETF (CHIL), which targets the 50 largest securities in China by market capitalization. In doing so, the fund is designed to provide efficient access to many of the most influential companies in China, across a variety of listing venues and share classes.
Each of these funds track MSCI indexes that consider China A, B and H shares, Red chips, P chips and foreign listings. China A shares are listed on domestic exchanges in China and currently boast a combined market capitalization of over $6 trillion. A shares were first added to MSCI’s Indexes, including China, Emerging Markets, and All Country World, in May 2018. The inclusion of this share class greatly expands the opportunity set of investible Chinese companies, which had previously been largely limited to shares listed in Hong Kong and on foreign exchanges.