CHXX: Emerging Global Launches China Infrastructure ETF

Recent hiccups aside, the China growth story still fascinates investors.   It’s not hard to see why: So many people moving from agrarian survival to modern cities in the space of a single generation is momentous.  Today (2/17/2010) brought a new way to get your money involved with the launch of EGS INDXX China Infrastructure Index Fund (CHXX) by Emerging Global Shares.

EG Shares, a relatively new player, has heretofore focused its attention on a series of emerging markets sector ETFs, most recently the EGS Dow Jones Emerging Markets Financials Titans Index Fund (EFN) in September 2009.  CHXX appears to be the first of what will be a new product suite based on other emerging market niches.  Several other funds are in registration.

CHXX will follow an index of Chinese companies that in various ways are involved in infrastructure and urbanization projects.  According to index provider IndXX, the China Infrastructure index includes 30 stocks that are listed in Hong Kong, NYSE, Nasdaq or the London Stock Exchange.   Average market capitalization was $8.3 billion as of 2/1/2010.  The top ten holdings include both familiar and unfamiliar names:

• China Communications Construction Company (5.74%)
• China Telecom (5.74%)
• Aluminum Corporation of China (5.74%
• China Railway Group (4.78%)
• Sino Ocean Land Company (4.47%)
• China Railway Construction (4.41%)
• China National Building Material Company (4.28%)
• Suntech Power Holdings (4.20%)
• Jiangxi Copper Company (4.19%)
• Huaneng Power International (4.10%)

Add up those numbers and the top ten holdings comprise almost half of the index.  By industry, the index is allocated 22.75% to Real Estate Management and Development, 15.22% to Metals & Mining, 14.93% to Construction & Engineering, 11.7% to Electrical Equipment, and the balance in a variety of other sectors.

CHXX will clearly rise or fall with the Chinese economy.  If the torrid growth pace continues, this ETF should perform well.  That is, of course, a very big “if.”  Nonetheless, EG Shares seems to be building out its product line at a deliberate pace.  We will see how the market treats CHXX.

CHXX Fact Sheet (PDF file)

CHXX Prospectus (PDF file)

EG Shares Home Page

Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.