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

Annex 2 – Description of

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
to your specific investment objectives, financial situation and any of your
particular needs. Accordingly, no warranty whatsoever is given and no
liability whatsoever is accepted for any loss arising whether directly or
indirectly as a result of this information. Investments are subject to
investment risks including possible loss of the principal amount invested. The
value of the product and the income from them may fall as well as rise. You may
wish to seek advice from an independent financial adviser before making a
commitment to purchase or invest in the investment product(s) mentioned herein.
In the event that you choose not to do so, you should consider whether the
investment product(s) mentioned herein are suitable for you. The writer will
not, in any event, be liable to you for any direct/indirect or any other
damages of any kind arising from or in connection with your reliance on any
information in and/or materials appended herein. The information and/or
materials are provided “as is” without warranty of any kind, either express or
implied.  In particular, no warranty regarding accuracy or fitness for a
purpose is given in connection with such information and materials.

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