Claymore Securities is launching a new exchange-traded fund for investors to get one more method exposure to the Chinese stock market. The new ETF is the Claymore/AlphaShares China All-Cap ETF (NYSE: YAO), and is Claymore’s third effort in a China-focused ETF. The other two ETFs are the Claymore/AlphaShares China Small Cap Index ETF (NYSE: HAO), built on Chinese small-cap companies; and then there is the Claymore/AlphaShares China Real Estate ETF (NYSE: TAO), focused on real estate companies in China.
Claymore called this the ideal time for investors to access China’s market through an all-cap product.
The “YAO” aims to track the AlphaShares China All Cap Index, which tracks the performance of the investable universe of publicly-traded companies of all market capitalizations of companies based in mainland China, although it does note that index members must have a float-adjusted market capitalization initially of $500 million or greater and a market cap of $400 million or greater for ongoing index inclusion.
As of September 30, 2009 the index included 99 securities: approximately 57% in large caps, 33% in mid-caps and 10% in small-caps. The index member weightings can be found at its index weightings section of the Claymore.com website.
We took a look through the list of constituents and what is different about this ETF compared to many other ETFs in China is that this one directly tracks many of the key companies directly on the exchanges in Hong Kong or in China rather than just the US-listed ADRs. Many of those ADRs are only available in Pink Sheet-listed securities. Otherwise, three of the top five index components would not be available to US-holders, and the top 5 constituents account for right about 25% of the entire weighting of the ETF.
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Jon C. Ogg
October 19, 2009
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