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.
“As the world’s most populous nation and second largest economy continues to expand, investors will need tools for accessing specific segments of its markets,” said Jay Jacobs, SVP, Head of Research and Strategy at Global X. “Until recently, investors primarily gained access to China through emerging market funds or single-country funds that paint with a broad brush and often miss or underweight attractive segments of the market. Given China’s size and growth, we’re thrilled to offer investors a comprehensive suite of tools that they can utilize for more specific exposures to China’s complex and dynamic market.”
Prior to today, Global X’s existing China Sector ETFs, which launched over 8 years ago, underwent recent index changes to track MSCI indexes. These funds include:
- The Global X MSCI China Communication Services ETF (NasdaqGM: CHIC)
- The Global X MSCI China Consumer Discretionary ETF (NYSEArca: CHIQ)
- The Global X MSCI China Energy ETF (NYSEArca: CHIE)
- The Global X MSCI China Financials ETF (NYSEArca: CHIX)
- The Global X MSCI China Industrials ETF (NYSEArca: CHII)
- The Global X MSCI China Materials ETF (NYSEArca: CHIM)
“We are pleased Global X selected MSCI indexes to bring a full suite of China sector ETFs to the market,” said Chin-Ping Chia, Managing Director and Head of Research for Asia at MSCI. “The MSCI China sector indexes are designed to measure the full opportunity set of the 11 economic sectors in China. As China’s equity market evolves, we anticipate there may be expanded opportunities emerging through these sectors.”
Global X’s suite of China Sector ETFs now totals 11 funds, and the broader family of International Access totals 21 ETFs.
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