An ETF to Get In On Chinese Healthcare's Banner Year | ETF Trends

In the U.S., the healthcare sector was one of the strong performers amid the height of the COVID-19 pandemic. The same can be said for China. The second largest economy is exhibiting signs of continued strength in the healthcare sector, which should help provide tailwinds for the Global X MSCI China Health Care ETF (CHIH).

CHIH is a thematic fund that certainly has its place given that China was the epicenter of the pandemic and is well on its way towards recovery. Given what the country has been through, investors can rest assured that healthcare investments are not going anywhere anytime soon.

The fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI China Health Care 10/50 Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in ADRs and GDRs based on the securities in the underlying index.

The underlying index tracks the performance of companies in the MSCI China Index (the “parent index”) that are classified in the health care sector, as defined by the index provider. Overall, the fund gives ETF investors:

  • Targeted Exposure: CHIH is a targeted play on the Health Care Sector in China – the world’s second largest economy by GDP.
  • ETF Efficiency: In a single trade, CHIH delivers access to dozens of health care companies within the MSCI China Index, providing investors an efficient vehicle to express a sector view on China.
  • 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.

CHIH Chart

Another prominent features is the 37% year-to-date gain per Yahoo Finance numbers. It’s hard to argue with results and its YTD performance shows the fund’s investment concept is working thus far.

It’s not surprising given the way healthcare has been to China this year. Per a Wall Street Journal report, “Chinese health-care companies are enjoying a banner year, with an overhaul of the country’s health system and relaxed listing rules helping fuel a surge in share sales.”

“More than 60 health-care companies from China have raised a total $16.3 billion from initial public offerings and secondary listings in Hong Kong, mainland China and elsewhere, according to Dealogic figures for the year through Nov. 11,” the article added. “The figure is already 138% higher than for all of 2019, and is a record by both deal value and number of companies. Health-care listings globally total $39.1 billion, roughly double all of last year’s sum.”

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