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WIKI ANALYSIS
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This article describes an exchange traded fund that tracks an index, commodity, currency, or varied basket of securites. View articles referencing this fund. |
iShares FTSE/Xinhua China 25 Index Fund is an ETF tracking the underlying index. The index was designed jointly by FTSE and Xinhua as one of the FTSE Xinhua Indices Series for international investors. [1] The ETF is issued under the IShares series. The Index is designed to represent the performance of the largest companies in the China equity market that are available to international investors. The Index consists of H Shares and Red Chip Shares of 25 of the largest and most liquid Chinese companies. This index is basically the Dow Jones of China.
Many constituents have ADRs listed on NYSE. In 2006 and 2007, many of them (such as LFC, PTR) offered IPO in Shanghai's A Shares market. The triple listing (Shangahi, Hong Kong, New York) represents one of most complicated arbitrage arrangement in the international stock market.
FXI is becoming one of most heavily traded ETFs on NYSE due to the boiling hot Chinese stock market. It is probably one of the few (best) investment options available to stock investors if he/she wants to participate in the growth of Chinese economy.
Index Components
The components are changing from time to time due to the large privatisation activities in the Chinese stock market. The top 10 constituents occupy almost 70% weight of the index:
- China Mobile (Red Chip)
- PetroChina Company (PTR) (H)
- China Life Insurance Company (LFC) (H)
- Industrial and Commercial Bank of China (H)
- China Construction Bank (H)
- CNOOC (CEO) (Red Chip)
- Bank of China (H)
- China Communications Construction (H)
- China Merchants Bank (H)
- Bank of Communications (H)
The detail information is shown below:
Note: HKD (Hong Kong Dollar) is officially maintained at $7.7 USD level.
You should notice that the float-adjusted capitalization is much smaller than the total capitalization, especially for China Mobile and PetroChina. It will become an important issue in the coming years when the Chinese government begin to sell these closely-held shares.
For a fuller coverage on Chinese stock market, one should resort to CSI 300 Index which is modelled after the S&P500 index and covers about 66% of the A-Shares market. [2]
References
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