China’s stricter regulatory measures against monopolies in the technology sector have yet to affect the energy sector if the performance of the Global X MSCI China Energy ETF (CHIE) is any indication — it’s up 25% in the past month.

CHIE seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI China Energy IMI Plus 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 Investable Market Index that are classified in the energy sector, as defined by the index provider. The fund is up about 50% so far in 2021.

CHIE gives investors:

  • Targeted exposure: CHIE is a targeted play on the Energy Sector in China, the world’s second-largest economy by GDP.
  • ETF efficiency: In a single trade, CHIE delivers access to dozens of energy 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.

CHIE Chart

Eyeing 2060 for Carbon Neutrality

China’s aggressive plans for carbon neutrality in the next 30 years make CHIE a prime long-term growth play as well. A reliance on alternative energy sources like solar and wind can help spur more innovative technologies that can boost CHIE’s holdings.

“China will need to fundamentally revamp its power generation and distribution system by 2060, as part of its roadmap to decarbonize the power sector and accommodate a fuel mix that largely replaces fossil fuels with cleaner energy sources, according to experts at a recent conference in Nanjing,” a S&P Global article said.

“The Chinese Society for Electrical Engineering, or CSEE, laid out one of the most detailed roadmaps issued by a Chinese think tank to date for achieving carbon neutrality by 2060 and peak emissions by 2030,” the article added.

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