Global X rolls out China thematic ETFs in Europe

Mar 5th, 2022 | By | Category: Equities

New York-based Global X has introduced a new suite of ETFs in Europe providing exposure to major investment themes within the Chinese equity market.

Global X rolls out China thematic ETFs in Europe

Global X has rolled out four China-focused thematic ETFs in Europe.

The suite initially consists of four funds targeting companies operating within the clean energy, electric vehicles, cloud computing, and biotechnology segments.

The ETFs have been listed on Xetra in euros and SIX Swiss Exchange in Swiss francs. Each comes with an expense ratio of 0.68%.

They are the Global X China Clean Energy UCITS ETF (CCLN GY; CCLN SW), Global X China Electric Vehicles UCITS ETF (CAUT GY; CAUT SW), Global X China Cloud Computing UCITS ETF (CCLD GY; CCLD SW), and Global X China Biotech UCITS ETF (CBIO GY; CBIO SW).

The funds are linked to Solactive indices which follow a similar construction process. The initial universe of stocks includes companies that are headquartered in China or Hong Kong, while eligible share types include Hong Kong listings, American Depository Receipts, and Chinese A-shares that are accessible through the Stock Connect program.

The methodology harnesses data from FactSet to screen the universe for firms operating within certain industries related to the underlying theme. It then uses a natural language processing tool to further narrow down the selection pool to companies that are closely aligned with the theme by searching for related keywords within company documents. Firms deemed to have only marginal exposure to the theme will be removed.

The selection process targets 20 stocks for the clean energy and electric vehicle indices and 30 for the cloud computing and biotechnology indices. The largest stocks are generally chosen while promoting diversification across industries and aiming to limit turnover. Constituents are weighted by float-adjusted market capitalization subject to a single stock cap of 9%.

Tags: , , , , , , , , ,

Leave a Comment