Chinese Real Estate ETF Surging On Talk Of A Bubble In China’s Property Market (TAO, FXI)
“One of top-performing exchange-traded funds so far in July tracks Chinese real estate companies as the small ETF has rallied more than 10% amid persistent talk of a bubble in China’s property market. Claymore/AlphaShares China Real Estate ETF (NYSE:TAO), with $43 million in assets, has rallied about 13% on the month through July 23. The fund invests in Chinese companies and real estate investment trusts open to foreign ownership. In all, the ETF holds 42 securities and carries and expense ratio of 0.65%,” John Spence Reports From Market Watch.
Spence goes on to say, “After suffering through a steep decline in April and May, the Chinese real estate ETF has bounced back close to its 2010 highs. The fund, launched in December 2007, tends to closely follow the largest ETF for Chinese stocks, the $8 billion iShares FTSE/Xinhua China 25 Index Fund (NYSE:FXI). However, the real estate ETF has jumped far ahead of the larger fund during its July rally.”
“For investors, one risk is the “surge in lending and stimulus spending in 2009, as the government eased restrictions on credit,” said Morningstar ETF analyst Patricia Oey in her latest profile of iShares FTSE/Xinhua China 25 Index Fund. “There is concern that bubbles have emerged in the country’s housing and stock markets.” Indeed, the large gyrations in Claymore/AlphaShares China Real Estate ETF just this year are a reminder of the volatility of concentrated emerging markets funds. However, it will be an interesting ETF to watch — if only from the sidelines, for many investors — as the bubble debate plays out,” Spence Reports.
Here are some more details on the Claymore/AlphaShares China Real Estate ETF (NYSE:TAO) and the iShares FTSE/Xinhua China 25 Index ETF (NYSE:FXI) below:
Claymore/AlphaShares China Real Estate ETF (NYSE:TAO)
The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the AlphaShares China Real Estate index. The fund normally invests at least 90% of total assets in common stock, ADRs, ADSs, GDRs and IDRs that comprise the index. It typically will invest in all of the stocks comprising the index in proportion to their weightings in the index. The fund is using a low cost passive or indexing investment approach. It is nondiversified.
|TOP 10 HOLDINGS (50.8% OF TOTAL ASSETS)|
iShares FTSE/Xinhua China 25 Index ETF (NYSE:FXI)
The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index. The fund generally invests at least 90% of assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index consists of 25 of the largest and most liquid Chinese companies. It may invest the remainder of assets in securities not included in its underlying index but which BGFA believes will help the fund track the underlying index. The fund is nondiversified.
|TOP 10 HOLDINGS (61.29% OF TOTAL ASSETS)|