Monday, November 4, 2013


Often we cover more general topics here and provide a fairly macro view of what our models are recognizing as trends, developments and opportunities within the world of ETFs.  We will focus more specifically on today’s highest ranked equity ETF, namely the iShares China Large Cap ETF (FXI), which received the highest Green Diamond Ranking available, a 10 out of 10, and a Red Diamond Risk Rating of just 5.30.

The best way to comprehensively review any ETFs is through the ETFG Tearsheet which contains up to 5 separate tabs of information:  Summary, Fund Statistics, Performance, Fund Flows and Product Info.  FXI has been in and out of our Top 10 Daily Rankings many times over recent months and is one of the funds we have pointed to as evidence that the ETFG Quant Model has recognized international opportunities and more specifically Asia and China.

FXI, with just over $5.5 Billion in AUM (Tearsheet Summary Tab) is obviously a large and recognized name within ETFs for exposure to China.  In addition, despite the nature of the Fund being China, the majority of its constituent exposure are within fairly recognizable Chinese names and this 60%+ is also contained in its Top 10 Holdings.

FXI Constituent Name
China Mobile Ltd
China Construction Bank Corp
Industrial & Commercial Bank of China Ltd
Tencent Holdings Ltd
Bank of China Ltd
PetroChina Co Ltd
China Petroleum & Chemical Corp
Ping An Insurance Group Co of China Ltd
Agricultural Bank of China Ltd
China Overseas Land & Investment Ltd

The key to the opportunity for FXI may lie in its relative performance to its Peer Group.  In looking at the Performance Tab of its ETFG Tearsheet, we see that FXI has underperformed  its relative Peer Group in the very near term for the most recent 1 and 3 month periods.  More importantly, FXI has severely lagged its Peer Group for the most recent One Year interval and perhaps that is where the opportunity to catch its Peer Group lies.

Please take a more comprehensive look at this ETF within the Tabs of the ETFG Tearsheet and thank you for reading ETFG Daily Perspectives.

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