As more investors become aware of the differences in Chinese equity exposure, WisdomTree has announced that China A-shares will be added to two of its ex-state-owned emerging market exchange traded funds.
The WisdomTree China ex-State-Owned Enterprises Fund (NYSEArca: CXSE) and the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (NYSEArca: XSOE) will include China A-shares exposure to help investors capitalize on opportunities resulting form China’s economic shift toward domestic consumption and services.
“Over the past year, WisdomTree has been evaluating the opportunity to add China A shares to our proprietary indexes,” Jeremy Schwartz, WisdomTree Director of Research, said in a note. “Given the continued openness of the Chinese domestic stock market to foreign investors, we are operationally ready to implement this change. The addition of China A shares to these indexes will provide investors with a more complete, diversified exposure.”
Specifically, the underlying indices tracked by CXSE and XSOE will include the 50 largest companies by float adjusted market capitalization that meet index requirements. The resulting A shares exposure will be capped at 25% for CXSE and 5% for XSOE.