2 ETFs to Ponder Considering China's Energy Shortage | ETF Trends

Heat waves and drought have been applying major pressure on China’s electric power grid. This could force the country to expand its electric infrastructure to accommodate the increased demand, pushing the need for more copper.

“China’s push for installing infrastructure to deliver 1,200 gigawatt of renewable energy capacity by 2025 would require an additional 3 million tonnes of copper, which would see annual copper demand from solar and wind increase by nearly 1 million tonnes,” ANZ noted in a Reuters article.

As energy becomes a scarce resource, one fund to consider for a broad-based play is the Global X MSCI China Energy ETF (CHIE). CHIE seeks to provide investment results that correspond generally to the price and yield performance of the MSCI China Energy IMI Plus 10/50 Index, which tracks the performance of companies in the MSCI China Investable Market Index that are classified in the energy sector, as defined by the index provider.

CHIE gives investors:

  1. Targeted exposure: CHIE is a targeted play on the energy sector in China — the world’s second-largest economy by GDP.
  2. ETF efficiency: In a single trade, CHIE delivers access to dozens of energy companies within the MSCI China Index, providing investors with an efficient vehicle to express a sector view on China.
  3. All share exposure: The index incorporates all eligible securities as per MSCI’s Global Investable Market Index Methodology, including China A, B, and H shares, Red chips, P chips, and foreign listings, among others.

A Copper Mining Play

With an increased demand for copper from the world’s second-largest economy, another fund to consider is the Global X Copper Miners ETF (COPX). COPX seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Global Copper Miners Total Return Index, which is designed to measure broad-based equity market performance of global companies involved in the copper mining industry.

COPX gives investors:

  • Targeted exposure: COPX is a targeted play on copper mining.
  • ETF efficiency: In a single trade, COPX delivers efficient access to a basket of companies involved in the mining of copper.

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