From an asset gathering perspective, the most successful of the group is the Global X MSCI China Consumer Discretionary ETF (CHIQ), with $121 million in assets. That fund’s share price zoomed more than 67 percent last year, but it’s down more than 26 percent year-to-date.
Three of the existing Global X China sector funds have gathered just $3 million or less in assets, which is extremely low for funds that have been around for roughly nine or more years. Jacobs attributes that to having an incomplete product category.
“Before this launch we had only half of a sector suite, which made it harder for investors to fully incorporate these strategies,” Jacobs says. “Now that we have the full suite, investors will be able to do the same thing with sectors in China that they do in the U.S.”
Namely, he notes, that means having the option to follow long-term strategies in such areas as China communications, consumer discretionary and health care, or being more tactical by rotating between cyclicals and defensives.
Regarding the new Global X MSCI China Large-Cap 50 ETF, Jacobs describes it as a low-cost way to play China’s mega- and large-cap segments. The fund’s expense ratio of 0.29 percent is 45 basis points less than the comparable iShares China Large-Cap ETF (FXI), which is the largest China-focused ETF with assets of $5.8 billion.