China ETFs – back in vogue with China market rally?

China market, as represented by Shanghai Composite Index (“SHCOMP”)
has appreciated about 15.8% from 1,960 on 3 Dec to 2,269 on 31 Dec. Since Nov,
I have been very interested in the China market but unfortunately, due
to time constraints, I was not able to research on this.
Some of my clients have asked me which ETFs better track the SHCOMP
and / or the Shanghai 50 A share (“SSE50”) Indices as there are too many ETFs
available. Below is my personal compilation of some of the ETFs and their
correlations with the SHCOMP and Shanghai 50 A share (“SSE50”) Indices. (See Table 1). I believe some readers are
also interested in this and so I am sharing this on my blog.
Table 1: Personal
compilation of some ETFs and their correlations with SHCOMP and SSE50
Source: Bloomberg as of 4 Jan 2013
With reference to Table 1,
Ishares FTSE A50 China Index (“2823”) and CSI300 China Tracker (“2827”) most
closely track SSE50 and SHCOMP indices respectively. In addition, if readers
want to find an ETF which tracks both SSE50 and SHCOMP indices closely, both
2823 and 2827 seem to be good choices based on Table 1 above. (Refer to their descriptions in the Annexes below
obtained from data sourced from Bloomberg as of 4 Jan 2013)
I will like to emphasise that what I have done above is to filter
out some ETFs which better track the aforementioned indices than the other ETFs.
Nevertheless, this is just one aspect of choosing an ETF. Please exercise
caution and do research before going in as these investments carry risk and may
not be suitable to your risk profile.
Thanks and have a good weekend ahead.
Annex 1 – Description of
2823


Annex 2 – Description of
2827


Disclaimer
The information contained herein is the writer’s
personal opinion and is provided to you for
information only and is not intended to or nor will it create/induce the
creation of any binding legal relations. The
information or opinions provided herein do not constitute
an investment advice, an offer or solicitation to subscribe for, purchase
or sell the investment product(s) mentioned herein. It does not have any regard
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In the event that you choose not to do so, you should consider whether the
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