New York-based asset manager Global X Management has launched the Global X China Consumer ETF and Global X China Industrials ETF.
These are the first exchange-traded funds globally that offer investors targeted access to the rapidly growing China consumer and industrial sectors.
The Global X China Consumer ETF seeks to replicate the S-BOX China Consumer Index, which is designed to reflect the performance of the consumer sector in China.
As of 30 October 2009, the largest stocks in the consumer index were food and beverage companies Tingyi and Want Want China, automobile company Dongfeng Motor Group, department store firm Parkson Retail Group, and sports apparel company Li Ning.
Chinese President Hu Jintao recently said the government is focused on expanding domestic spending, “especially consumer demand.” In October, China’s retail sales jumped 16.2 per cent from a year earlier. This trend is expected to continue as consumer spending currently accounts for only 36 per cent of China’s GDP, about half the level of the US.
The Global X China Industrials ETF seeks to replicate the S-BOX China Industrials Index, which is designed to reflect the performance of the industrial sector in China.
As of 30 October 2009, the largest stocks in the industrials index were diversified industrial manufacturer BYD, infrastructure groups China Communications Construction and China Railway Group, industrial shipping and logistics services company China COSCO Holdings, and building materials firm China National Building Material Group.
China is also spurring its industrials sector with a USD580bn stimulus package directed towards construction, railways, subways and airports. In October, China’s industrial output rose 16.1 per cent from a year earlier. According to economic forecasting firm IHS Global Insight, China will overtake the US as the world’s largest manufacturer by 2015.
“China is an incredibly efficient manufacturing hub for the world, as well as the main source of growth in global consumer demand,” says Bruno del Ama, chief executive of Global X Management. “The China Industrials ETF and China Consumer ETF provide efficient and diversified access to these China manufacturing and consumption themes.”
The ETFs are part of a family of China sector ETFs, which also includes the China Energy ETF, China Financials ETF, China Materials ETF and China Technology ETF. These other China sector ETFs are not yet available for purchase.