Global X adds five ETFs to China sector suite

Dec 12th, 2018 | By | Category: Equities

Global X Funds has launched six new China-focused ETFs.

Jay Jacobs, Head of Research and Strategy at Global X.

Jay Jacobs, Head of Research and Strategy at Global X.

China sector ETFs 

Five of the new ETFs provide targeted sector exposure and round out the firm’s existing suite of six China sector ETFs.

Together, the funds provide a full offering that corresponds with each of the eleven major economic sectors identified by the Global Industry Classification Standard (GICS): communication services, consumer discretionary, consumer staples, energy, financials, health care, industrials, materials, real estate, information technology, and utilities.

“As the world’s most populous nation and second largest economy continues to expand, investors will need tools for accessing specific segments of its markets,” said Jay Jacobs, Head of Research and Strategy at Global X.

Jacobs continued, “Until recently, investors primarily gained access to China through emerging market funds or single-country funds that paint with a broad brush and often miss or underweight attractive segments of the market. Given China’s size and growth, we’re thrilled to offer investors a comprehensive suite of tools that they can utilize for more specific exposures to China’s complex and dynamic market.”

The five new sector funds are:

Global X MSCI China Consumer Staples ETF (CHIS US)
Global X MSCI China Health Care ETF (CHIH US)
Global X MSCI China Information Technology ETF (CHIK US)
Global X MSCI China Real Estate ETF (CHIR US)
Global X MSCI China Utilities ETF (CHIU US)

Each of these funds tracks an MSCI index that covers China A, B, and H shares, Red chips, P chips, and foreign listings.

Global X’s existing China sector ETF range, which launched over eight years ago, recently underwent changes which included switching from Solactive to MSCI indices. These funds include:

Global X MSCI China Communication Services ETF (CHIC US)
Global X MSCI China Consumer Discretionary ETF (CHIQ US)
Global X MSCI China Energy ETF (CHIE US)
Global X MSCI China Financials ETF (CHIX US)
Global X MSCI China Industrials ETF (CHII US)
Global X MSCI China Materials ETF (CHIM US)

The ETFs collectively house approximately $200 million in assets under management, of which around $130m is in CHIQ. Each fund in the suite comes with an expense ratio of 0.65%.

“We are pleased Global X selected MSCI indices to bring a full suite of China sector ETFs to the market,” said Chin-Ping Chia, Head of Research for Asia at MSCI. “The MSCI China sector indices are designed to measure the full opportunity set of the eleven economic sectors in China. As China’s equity market evolves, we anticipate there may be expanded opportunities emerging through these sectors.”

China large-cap ETF

Global X has also launched the Global X MSCI China Large-Cap 50 ETF (CHIL US), providing exposure to the 50 largest securities in China by market capitalization.

The fund is linked to the MSCI China Top 50 Select Index which draws its constituents from the parent MSCI China Index – a broad reference for Chinese equities that includes a variety of listing venues and share classes. Stocks are weighted by free float-adjusted market capitalization subject to a limit of 10%. Reconstitution and rebalancing occur quarterly.

Banks lead the industry exposure with a weight of 22.5%, followed by companies in the interactive media (13.1%), internet retail (11.6%), insurance (8.8%), and oil & gas (8.2%) industries. The top holdings in the fund are Tencent (9.8%), Alibaba (9.3%), China Construction Bank (7.0%), China Mobile (5.4%), and Ping An Insurance (4.6%).

CHIL comes with an expense ratio of 0.29%.

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