AlphaShares has introduced the first China All Cap index designed to track Chinese companies of all capitalization sizes.
The AlphaShares China All Cap Index (Bloomberg: ACNAC) measures the performance of large-, mid-, and small-capitalization Chinese companies currently trading on the Hong Kong or New York stock exchanges and available to international investors. The index uses a modified market capitalization weighting methodology that limits individual companies to five percent of the index and sector exposure to 35 percent of the index. It does not currently include China A-Shares or China B-Shares.
“The major China indexes and the ETFs based on them are materially flawed,” said Dr Burton G Malkie (pictured), Co-founder and Chief Investment Officer of AlphaShares. “The largest does not include important Chinese technology companies such as Baidu, BYD or Tencent. It has 45 per cent exposure to financials – dominated by extremely large state owned banks. It has nearly 20 per cent in state owned oil companies, and perhaps worse, it has no exposure to the Consumer sectors.
“Investors should be seeking exposure to China but they should look more closely at what they are buying when they use an (index-based) ETF. We believe the AlphaShares China All Cap Index is now the best index available for investors seeking exposure to the increasingly important China equities market.”
The AlphaShares China All Cap Index has been licensed to Claymore Advisors, LLC and it is anticipated to be the basis for the Claymore/AlphaShares China All-Cap ETF that is scheduled to launch later this month. AlphaShares has licensed two other China indexes to Claymore. The AlphaShares China Real Estate Index (Bloomberg: ACNRE) serves as the basis for the Claymore/AlphaShares China Real Estate ETF which provides exposure to Chinese real estate companies and the AlphaShares China Small Cap Index serves as the basis for the Claymore/AlphaShares China Small Cap Index ETF which provides exposure to Chinese small cap stocks.