The iShares China Large-Cap ETF (NYSEARCA:FXI) tracks a market-cap-weighted index of the 50 largest Chinese stocks traded on the Hong Kong Stock Exchange.
FXI, one of the oldest China-focused ETFs on the market, is a concentrated portfolio of 50 large-cap H-shares, P-chips and Red Chips listed in Hong Kong. Notably, mainland-listed A-shares and U.S.-listed Chinese mega-caps (classified as an N-share) are excluded from the fund’s portfolio.
The fund draws its selection universe from the FTSE All World Index. Stocks are further screened for liquidity to ensure that the market-cap-weighted index is tradable. To avoid overconcentration in the index, stock weights are capped at 9%. The index is reconstituted and rebalanced quarterly.
Below is a sector-by-sector breakdown of FXI’s holdings.
The fund’s benchmark is the FTSE China 50 Index. FXI, launched October 5, 2004, has 119,250,000 shares outstanding and a price to earnings ratio (P/E) of 13.31.
The fund has $4.9 billion assets under management, along with 50 holdings. It has a 0.02% average spread and a 0.75% expense ratio. FXI currently trades around $40 a share, giving it a nice 2.02% distribution yield.
Why choose this iShares fund? 1) To gain exposure to large-cap companies in China; 2) To gain access to 50 of the largest Chinese stocks in a single fund.
However, as with any opportunity, I urge all potential investors to exercise their own due diligence in deciding whether or not this fund fits their own individual portfolio goals.