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China ETF



With the burgeoning Chinese economy growing at an unprecedented rate, investors have been clamoring to gain access to the growth in earnings and rise in Chinese stocks. The current regulation of the Chinese markets prohibits the purchase of A class shares by foreigners. Although foreigners can purchase B class or H class shares listed in Hong Kong, investors have been searching for alternative investment vehicles. China ETF's are a product that is listed in the US markets and allows investors to purchase a position without the need to deal with the challenges of buying offshore.

Chinese exchange traded funds such as the iShare FTSE/Xinhua China 25 Index, SPDR S&P China and Powershares Golden Dragon Halter USX China funds are examples of funds comprising Chinese stocks. Unlike conventional stocks, exchange traded funds are a basket of stocks representing an asset class, region or sector. The advantage of investing in ETF's is that you are not exposed to the movements of just one stock. The basket weighting minimizes the effect of any one adverse movement in one of the constituents whilst still providing upside potential from exposure to the sector.

The constituent shares comprising the ETF's for China Are as follows:

IShare FTSE/Xinhua China 25 Index ETF: Top 10 Holdings

China Mobile: 9.49 %
PetroChina Co Ltd: 8.46%
China Life Insurance Co Ltd: 8.45%
Industrial and Commercial Bank of China Ltd: 5.87%
China Construction Bank Corp: 5.55%
Ping An Insurance (Group) Co of China Ltd: 4.75%
China Shenhua Energy Co Ltd: 4.44%
China Communications Construction Co: 4.32%
China Merchants Bank Co Ltd: 4.22%
CNOOC LTD SHS: 4.14%

Powershares Golden Dragon Halter USX China fund ETF: Top 10 Holdings

PetroChina Co Ltd Depository Receipts: 5.99%
China Mobile Ltd Depository Receipts: 5.85%
Yanzhou Coal Mining Co Ltd Depository Receipts: 4.94%
CNOOC Ltd Depository Receipts: 4.56%
Huaneng Power International Inc Depository Receipts: 4.46%
China Unicom Ltd Depository Receipts: 4.45%
Aluminum Corporation of China Ltd Depository Receipts: 4.42%
China Petroleum and Chemical Corp (Sinopec) Depository Receipts: 4.37%
China Life Insurance Co Ltd Depository Receipts: 4.37%
China Netcom Group Corporation (Hong Kong) Ltd Depository Receipts: 4.28%

SPDR S&P China ETF: Top 5 Holdings
China Mobile LtdTelcommunications:12.86 %
China Life InsuranceFinancial Services: 6.85 %
PetroChinaEnergy: 5.92 %
China Construction BankFinancial Services: 5.21 %
CNOOC LtdEnergy: 4.01 %

* The reported percentage holdings are subject to market change.


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