Home > A List Of The Top Ten China ETFs (FXI, GXC, YAO, HAO, EWH)
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A List Of The Top Ten China ETFs (FXI, GXC, YAO, HAO, EWH)

August 24th, 2011

David Fry:  Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

China remains the world’s fastest growing economy continues to intrigue and draw investors to it. The high rated of economic growth has positive implications for investments opportunities. At the same time high rates of growth create inflationary pressures which can quickly cause turmoil and losses for linked equity markets. There remains a level of regulatory and corporate governance mistrust among some investors questioning the accuracy of accounting standards and enforcement.

There are enough ETF choices from which to choose and we provide you with some of the most popular choices. We’ve cobbled some good choices together and where repetitive choices exist we’ve paired some together having similarities too hard to ignore.

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We’re not ranking these ETFs favoring one over another so don’t let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it’s not our intention to recommend one over another.

Our technical analysis methodology involves using, where possible, monthly charts with enough data to allow investors to stay on the right side of the 12 month moving averages. Further, when market prices move too far above or below this moving average investors can assume a correction in the other direction will eventually take place. In this regard caution is advised.

ProShares and Direxion Shares both offer inverse and leveraged long ETFs for those investors wishing to hedge or speculate.

First Trust Chindia ETF (NYSE:FNI) follows the ISE Chindia ETF which consists of 50 ADRs and or stocks of companies domiciled in China or India. The fund was launched in May 2007. The expense ratio is .60%. AUM (Assets under Management) equal $130 million and average daily trading volume is 48K shares. As of mid-August 2011 the annual dividend was $.05 making the current yield .22% and YTD return -9.50%.

Data as of August 2011

FNI Top Ten Holdings & Weightings

  1. Baidu, Inc. ADR (BIDU): 7.63%
  2. HDFC Bank Ltd ADR (HDB): 7.14%
  3. ICICI Bank Ltd ADR (IBN): 7.08%
  4. China Mobile Ltd. ADR (CHL): 6.96%
  5. Infosys Ltd ADR (INFY): 6.85%
  6. CNOOC, Ltd. ADR (CEO): 6.61%
  7. SINA Corporation (SINA): 4.41%
  8. Ctrip.com International, Ltd. ADR (CTRP): 4.03%
  9. PetroChina Company, Ltd. ADR (PTR): 4.02%
  10. Sterlite Industries (India), Ltd. ADR (SLT): 3.86%

iShares China 25 Index ETF (NYSE:FXI) follows the FTSE China 25 Index which measures the performance of the largest companies in the China equity market. The fund was launched in October 2004. The expense ratio is .72%. AUM equal nearly $6 million and average daily trading volume is 18M shares. As of mid-August 2011 the annual dividend was $.17 making the current yield .47% and YTD return of -14.80%.

Direxion Shares and ProShares each have inverse and leveraged products available for those wishing to hedge or speculate.

Data as of August 2011

FXI Top Ten Holdings & Weightings

  1. China Mobile Ltd. (00941): 9.68%
  2. China Construction Bank Corp (00939): 9.22%
  3. Industrial And Commercial Bank Of China Ltd. (01398): 7.96%
  4. CNOOC, Ltd. (00883): 6.51%
  5. Bank Of China Ltd. (03988): 5.46%
  6. China Telecom Corp Ltd (00728): 4.32%
  7. Ping An Insurance Group (02318): 4.27%
  8. China Shenhua Energy Company Limited (01088): 4.23%
  9. China Petroleum & Chemical Corporation (00386): 4.07%
  10. Agricultural Bank of China Ltd. (01288): 4.01%

PowerShares Golden Dragon ETF (NYSE:PGJ) follows the Halter USX China Index which is comprised of U.S.-listed securities of companies that derive a majority of their revenue from China. The fund was launched in December 2004. The expense ratio is .60%. AUM equal $320 million and average daily trading volume is 84K shares. As of mid-August 2011 the annual dividend was $.11 making the current yield .58% and YTD return -11.30%.

Data as of August 2011

PGJ Top Ten Holdings & Weightings

  1. Baidu, Inc. ADR (BIDU): 6.08%
  2. PetroChina Company, Ltd. ADR (PTR): 5.89%
  3. Aluminum Corp of China, Ltd. ADR (ACH): 4.57%
  4. China Mobile Ltd. ADR (CHL): 4.56%
  5. China United Network Communications Ltd. ADR (CHU): 4.54%
  6. CNOOC, Ltd. ADR (CEO): 4.53%
  7. China Petroleum & Chemical Corporation ADR (SNP): 4.52%
  8. China Life Insurance Company, Ltd. ADR (LFC): 4.51%
  9. China Telecom Corp Ltd ADR (CHA): 4.46%
  10. Yanzhou Coal Mining Company Limited ADR (YZC): 4.40%

SPDR S&P China ETF (NYSE:GXC) follows the S&P China BMI Index which is a market capitalization weighted index of companies traded in China available to foreign investors. The fund was launched in March 2007. The expense ratio is .59%. AUM equal $688 million and average daily trading volume is 112K shares. As of mid-August 2011 the annual dividend was $.29 making the current yield .44% and YTRD return -9.15%.

Data as of August 2011

GXC Top Ten Holdings & Weightings

  1. China Construction Bank Corp (00939): 6.87%
  2. China Mobile Ltd. (00941): 6.74%
  3. Baidu, Inc. ADR (BIDU): 5.79%
  4. Industrial And Commercial Bank Of China Ltd. (01398): 5.22%
  5. CNOOC, Ltd. (00883): 4.58%
  6. PetroChina Company, Ltd. (00857): 3.76%
  7. Bank Of China Ltd. (03988): 3.50%
  8. China Life Insurance Company, Ltd. (02628): 3.40%
  9. Tencent Holdings Ltd. (00700): 2.68%
  10. China Shenhua Energy Company Limited (01088): 2.30%

Guggenheim China All-Cap ETF (NYSE:YAO) follows the AlphaShares China All-Cap Index which includes companies with market capitalizations greater than $500 million. The fund was launched in October 2009. The expense ratio is .70%. AUM equal $72.5 million and average daily trading volume is 27K shares. As of mid-August 2011 the annual dividend was $.28 making the current yield 1.15% and YTD -10.45%.

Data as of August 2011

YAO Top Ten Holdings & Weightings

  1. Baidu, Inc. ADR (BIDU): 6.63%
  2. China Mobile Ltd. (00941): 5.04%
  3. Industrial And Commercial Bank Of China Ltd. (01398): 5.04%
  4. CNOOC, Ltd. (00883): 4.74%
  5. China Construction Bank Corp (00939): 4.45%
  6. PetroChina Company, Ltd. (00857): 4.36%
  7. Bank Of China Ltd. (03988): 4.06%
  8. China Life Insurance Company, Ltd. (02628): 3.62%
  9. Tencent Holdings Ltd. (00700): 3.11%
  10. China Shenhua Energy Company Limited (01088): 2.49%

Guggenheim China Small Cap ETF (NYSE:HAO) follows the AlphaShares China Small Cap Index which is a proprietary measure of companies is China with a minimum market capitalization of $200 million to a maximum of $1.5 billion. The fund was launched in January 2008. The expense ratio is .70%. AUM equal $220 million and average daily trading volume is 160K shares. As of mid-August 2011 the annual dividend was $.44 making the current yield 1.85% and YTD return -21.20%.

Data as of August 2011

HAO Top Ten Holdings & Weightings

  1. China Shanshui Cement Group Limited (00691): 1.93%
  2. Mindray Medical International Limited ADR (MR): 1.54%
  3. Tsingtao Brewery Co., Ltd. (TSGTF): 1.53%
  4. Zhaojin Mining Industry Co. Ltd. (01818): 1.43%
  5. BBMG Corporation (02009): 1.40%
  6. SOHO China Limited (00410): 1.39%
  7. Great Wall Motor Co., Ltd. (02333): 1.28%
  8. Renhe Commercial Holdings Company Limited (01387): 1.28%
  9. Yingde Gases Group Co., Ltd. (2168): 1.19%
  10. China Everbright Ltd. (00165): 1.16%

iShares China ETF (NYSE:FCHI) follows the FTSE China Hong Kong Listed Index which includes mid-cap and large-cap companies listed in Hong Kong. The fund was launched in June of 2008. The expense ratio is .72%. AUM equal $47 million and average daily trading volume is 6K shares. As of mid-August 2011 the annual dividend was $.38 making the current yield .88% and YTD return -15.25%.

Data as of August 2011

FCHI Top Ten Holdings & Weightings

  1. China Mobile Ltd. (00941): 9.87%
  2. China Construction Bank Corp (00939): 9.61%
  3. Industrial And Commercial Bank Of China Ltd. (01398): 8.19%
  4. CNOOC, Ltd. (00883): 6.63%
  5. PetroChina Company, Ltd. (00857): 4.94%
  6. Bank Of China Ltd. (03988): 4.77%
  7. China Life Insurance Company, Ltd. (02628): 4.08%
  8. Ping An Insurance Group (02318): 3.80%
  9. China Shenhua Energy Company Limited (01088): 2.82%
  10. China Petroleum & Chemical Corporation (00386): 2.73%

iShares Hong Kong ETF (NYSE:EWH) follows the MSCI Hong Kong Index which is a proprietary measure of the entire Hong Kong equity market. The fund was launched in March 1996 and is the granddaddy of all China-based funds. The expense ratio is .53%. AUM equal $1.5 billion and average daily trading volume is 5.8M shares. As of mid-August 2011 the annual dividend was $.17 making the current yield 1% and YTD return -10.50%.

Data as of August 2011

EWH Top Ten Holdings & Weightings

  1. AIA Group Ltd. (01299): 8.64%
  2. Hutchison Whampoa, Ltd. (00013): 7.43%
  3. Hong Kong Exchanges and Clearing Ltd. (00388): 6.84%
  4. Sun Hung Kai Properties, Ltd. (00016): 6.72%
  5. Cheung Kong Holdings, Ltd. (00001): 6.46%
  6. CLP Holdings Limited (CLPHF): 5.46%
  7. Hang Seng Bank Ltd. (00011): 3.82%
  8. Swire Pacific Ltd. (00019): 3.73%
  9. Li & Fung Ltd. (00494): 3.59%
  10. Hong Kong and China Gas Co., Ltd. (00003): 3.43%

Index IQ recently launched a small-cap Hong Kong ETF (NYSE:HKK) which should bear some watching as it seasons.

iShares MSCI China ETF (NYSE:MCHI) follows the MSCI China Index which is the proprietary index measuring large-cap China equities. The fund was launched in March 2011. The expense ratio is .61%. AUM equal $25 million and average daily trading volume is 7.5K shares. As of mid-August 2011 the annual dividend yield was unavailable and YTD return was -16.70%.

Data as of August 2011

MCHI Top Ten Holdings & Weightings

  1. China Mobile Ltd. (00941): 8.03%
  2. Industrial And Commercial Bank Of China Ltd. (01398): 6.65%
  3. CNOOC, Ltd. (00883): 6.00%
  4. China Construction Bank Corp (00939): 5.74%
  5. PetroChina Company, Ltd. (00857): 4.48%
  6. Bank Of China Ltd. (03988): 4.11%
  7. Tencent Holdings Ltd. (00700): 3.93%
  8. China Life Insurance Company, Ltd. (02628): 3.70%
  9. Ping An Insurance Group (02318): 2.53%
  10. China Petroleum & Chemical Corporation (00386): 2.42%

Global X China Consumer ETF (NYSE:CHIQ) follows the Solactive China Consumer Index which includes companies domiciled in China which have a consumer orientation. The fund was launched in November 2009. The expense ratio is .65%. AUM equal $177 million and average daily trading volume is 114K shares. As of mid-August 2011 the annual dividend was $19 making the current yield 1.14% and YTD return -7.05%.

Data as of August 2011

CHIQ Top Ten Holdings & Weightings

  1. GOME Electrical Appliances Holding Ltd. (GMELF): 6.37%
  2. Dongfeng Motor Group Co., Ltd. (00489): 6.09%
  3. Tingyi (Cayman Islands) Holding Corp. (TCYMF): 5.77%
  4. Hengan International Group Co., Ltd. (01044): 5.28%
  5. China Resources Enterprise Ltd. (00291): 5.16%
  6. New Oriental Education & Technology Group Inc. ADR (EDU): 4.80%
  7. Want Want China Holdings Limited (WWNTF): 4.76%
  8. Focus Media Holding, Ltd. ADR (FMCN): 4.49%
  9. China Yurun Food Group Ltd. (01068): 4.09%
  10. Guangzhou Automobile Group Co., Ltd. (02238): 4.02%

Two other ETFs stand-out as possible inclusions with the first being EG Shares China Infrastructure ETF (NYSE:CHXX) which is included in another list and follow the INDXX China Infrastructure Index. It includes the 30 leading companies involved in this sector.

Lastly is Van Eck China ETF (NYSE:PEK) which follows the Shanghai CSI 300 Index. Unfortunately it hasn’t received the exemption from the local authorities to buy shares that can track the popular index and must use a third party with derivatives to do so. This has created a large premium. However, once they’ve obtained this license this will be one of the most important China-based ETFs.

ETF choices from China will continue to rapidly increase. Sometimes these offerings will need seasoning before investors can verify performance trends and validate investing in them. We’ve chosen to feature some that may be repetitive but clearly have something to offer as well. Some other Top 10 lists we’ve published may have similar ETFs within them and can become duplicative but we’ll just have to live with this on occasion.

One thing seems clear when viewing many of these ETFs are similar trend patterns many have presented. This is primarily due to globalization but also is the result of easy monetary conditions throughout the developed world allowing for higher levels of correlation.

For further information about portfolio structures using this or other ETFs see http://www.etfdigest.com/.

(Source for holding data is from ETF Database and from various sponsors.)

Written By David Fry From ETF Digest 

David is founder and publisher of ETF Digest and best selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management published by Wiley Finance in 2008.  In July of 2009, Fry was named in the ETF Hall of Fame as one of the Top 25 people who revolutionized the ETF industry and guided ETF investing from its conception to widespread acceptance among all breeds of investors. Fry founded the ETF Digest in 2001 and was among the very first to see the need for an online publication that provided individual investors and financial professionals with trading tools, market information and actionable advice on ETF investing.  ETF Digest was recently ranked 9th in the Top 100 ETF websites from Alexa on exchange traded funds. Dave Fry has devoted over 35 years to the business of trading and portfolio management. He is registered as an arbitrator with the Financial Industry Regulatory Authority (FINRA) and the National Futures Association (NFA).


NYSE:EWH, NYSE:FNI, NYSE:FXI, NYSE:GXC, NYSE:HAO, NYSE:HKK, NYSE:PGJ, NYSE:YAO


 

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