NEW YORK (
) -- The new
Claymore/AlphaShares' China All-Cap ETF
is aimed at a new group of China investors looking for a well-rounded fund.
In an ETF marketplace dominated by large-cap offerings like
iShares FTSE/Xinhua China 25 Index
, and small-cap funds like
Claymore/AlphaShares China Small Cap Index ETF
, YAO tries to achieve diversification.
YAO joins a pair of existing Claymore China funds, including HAO and
Claymore/AlphaShares China Real Estate ETF
. FXI, the iShares behemoth, dominates when it comes to market share, with nearly 22 million shares changing hands each day.
FXI, however, takes a limited market-cap-weighted approach. Launched in October 2004, FXI seeks to track the 25 largest companies in the Chinese equity space, many of which are government-owned. Top components include
China Life Insurance
. Sector allocation is heavily weighted toward financials, which comprise more than 45% of the fund's underlying assets and makes FXI's sector exposure lopsided.
YAO's portfolio includes many of the same government-controlled giants as FXI, but also offers exposure to smaller-cap equities. While 53% of the YAO portfolio is currently dedicated to large-cap firms, mid- and small-cap companies comprise 33% and 10% of the portfolio, respectively.
The resulting mix in YAO's underlying basket offers a slightly more balanced view when it comes to sector allocation. Financials make up 34.87% of the portfolio, while energy and information technology make up 17.89% and 11.61%, respectively. Investors will still be weighted toward financials, but not cornered by a strong financial sector bias.
When it comes to sector balance, YAO's biggest competitor will likely be the
SPDR S&P China ETF
, which focuses on large-cap China firms. GXC's top three sector holdings are also financials, energy and telecommunication, with 33.22%, 19.24% and 12.80% allocations respectively.