Buying china A50 ETF

[Kaypohji]

Anybody thought of investing in China etf specifically ?

I saw FSMone does offer that option for RSP

 

[danerine]

Anybody thought of investing in China etf specifically ?

I saw FSMone does offer that option for RSP

I am vested in China A50 etf. Which counter are you referring to in fsm?

 

[Kaypohji]

I’m referring to 2828 and 2823

Hoping to invest in China to track their index growth

Mind sharing how’s your portfolio like to consist of China ? And if the returns have been good if u have been investing for quite some time in it.

Btw, I was looking at its website. And fsmone says it has a minimum lot of 100?
We can have lesser than that for RSP and fractional shares right ?

I am vested in China A50 etf. Which counter are you referring to in fsm?

 

[chrisloh65]

Avoid 2823 because it is a synthetic ETF - meaning it does not hold real stocks but options and ETNs etc (no idea who is counter-party, may be the ETF provider itself?)

A better substitute for 2823 is 2822.



ISFTSEA50CETF/UT HKD
HKG: 2823
iShares FTSE A50 China Index ETF (安碩A50中國基金)
Description
The iShares FTSE A50 China Index ETF, a sub-fund of the iShares Asia Trust, is the fund to track the performance of the FTSE China A50 Index quoted in RMB. The fund did not hold shares as their the component, due to restriction on purchasing A shares. Wikipedia

I’m referring to 2828 and 2823

Hoping to invest in China to track their index growth

Mind sharing how’s your portfolio like to consist of China ? And if the returns have been good if u have been investing for quite some time in it.

Btw, I was looking at its website. And fsmone says it has a minimum lot of 100?
We can have lesser than that for RSP and fractional shares right ?

 

[polyglob]

How about 3169 Vanguard All China ETF? Lower fees: 0.4% vs 0.99%

Avoid 2823 because it is a synthetic ETF - meaning it does not hold real stocks but options and ETNs etc (no idea who is counter-party, may be the ETF provider itself?)

A better substitute for 2823 is 2822.



ISFTSEA50CETF/UT HKD
HKG: 2823
iShares FTSE A50 China Index ETF (安碩A50中國基金)
Description
The iShares FTSE A50 China Index ETF, a sub-fund of the iShares Asia Trust, is the fund to track the performance of the FTSE China A50 Index quoted in RMB. The fund did not hold shares as their the component, due to restriction on purchasing A shares. Wikipedia

 

[chrisloh65]

My concern is the very low liquidity with 3169.
You just look at the traded volumes now: 3169 = 58k
2822 = 4868k.

The spread you are paying for 2822 is going to be much lower buying 2822 than 3169, and also easier to sell at good price when you want to get out.

Obviously 3169 benefit is lower fee, but I prefer 2822 (despite higher fee).

How about 3169 Vanguard All China ETF? Lower fees: 0.4% vs 0.99%

 

[polyglob]

Good point.

The Vanguard fund is listed 3 times - 3169 HKD, 83169 RMB and 9169 USD - but the other 2 counters even lower liquidity.

My concern is the very low liquidity with 3169.
You just look at the traded volumes now: 3169 = 58k
2822 = 4868k.

The spread you are paying for 2822 is going to be much lower buying 2822 than 3169, and also easier to sell at good price when you want to get out.

Obviously 3169 benefit is lower fee, but I prefer 2822 (despite higher fee).

 

[Kaypohji]

Any comments on 2828???

 

[chrisloh65]

Looks OK to me but 2828 holds HK-listed stocks of China companies (not China-listed A shares).

Any comments on 2828???

 

[Kaypohji]

Oh my bad I didn’t check carefully.

Any index funds that track China listed A shares with good liquidity? Or it’s the one u mention below??

Looks OK to me but 2828 holds HK-listed stocks of China companies (not China-listed A shares).

 

[RedsYWNA]

Oh my bad I didn’t check carefully.

Any index funds that track China listed A shares with good liquidity? Or it’s the one u mention below??

A-shares tend to be state-owned enterprises (SOE). For diversified holdings with gd liquidity, I feel Mchi or GXC is better, as it covers all China companies.

My personal opinion is SOE pulls down the overall returns (just like our STI's GLC).

Better off just to invest in Baba and Tencent directly instead, since they are entrenched for the next 5 years at least.

 

[Kaypohji]

I was thinking not to hold just 1 specific stock of a company to diversify

The two companies u mentioned r good but Just thinking of betting on the whole of China is safer ?

A-shares tend to be state-owned enterprises (SOE). For diversified holdings with gd liquidity, I feel Mchi or GXC is better, as it covers all China companies.

My personal opinion is SOE pulls down the overall returns (just like our STI's GLC).

Better off just to invest in Baba and Tencent directly instead, since they are entrenched for the next 5 years at least.

 

[RedsYWNA]

I was thinking not to hold just 1 specific stock of a company to diversify

The two companies u mentioned r good but Just thinking of betting on the whole of China is safer ?

For whole of China with gd liquidity, GXC is the most diversified, while MCHI isnt too bad also. Both are listed in US, and their prices tend to move in tandem.

The HK ETFs either dont cover the whole of China, or if they do, liquidity tends to be low, eg 2801 which is nicely diversified but low liquidity.

 

[Kaypohji]

Listed in US meaning subject to the 30% wht?

Thanks a lot for the detailed explanation.

I will do a comparison...

For whole of China with gd liquidity, GXC is the most diversified, while MCHI isnt too bad also. Both are listed in US, and their prices tend to move in tandem.

The HK ETFs either dont cover the whole of China, or if they do, liquidity tends to be low, eg 2801 which is nicely diversified but low liquidity.

 

[chrisloh65]

For real A-shares on HKSE that is liquidly traded, I only know 2822.

Oh my bad I didn’t check carefully.

Any index funds that track China listed A shares with good liquidity? Or it’s the one u mention below??

 

[chrisloh65]

Are owning GXC and MCHI subject to estate duty above US$60K?

What about ADS listed on US stock exchange?

For whole of China with gd liquidity, GXC is the most diversified, while MCHI isnt too bad also. Both are listed in US, and their prices tend to move in tandem.

The HK ETFs either dont cover the whole of China, or if they do, liquidity tends to be low, eg 2801 which is nicely diversified but low liquidity.

 

[RedsYWNA]

Are owning GXC and MCHI subject to estate duty above US$60K?

What about ADS listed on US stock exchange?

Yes, MCHI and GXC are subject to the 30% WHT and estate taxes. Their dividend yield is low anyway, so primary consideration is the estate taxes.

ADR are not subject to both, hence I did buy a few ADR on the US stock exchanges.

 

[htngwilliam]

What is the issue of China shares listed in HK? I think the volatility is lower

 

[Shiny Things]

Anybody thought of investing in China etf specifically ?

I saw FSMone does offer that option for RSP

We get this question A LOT, and there isn't one clean answer. (Incidentally, why is it always China? I get "how do I invest in China ETF?" even more than I get "how do I invest in US stocks?".)

Firstly, are you sure you want to do this? When you buy a China ETF instead of a global ETF, you're betting that the Chinese stock market will outperform the MSCI World. For that to happen, one of three things has to happen:

* Chinese banks manage to work themselves out from under their GARGANTUAN pile of bad loans; or,
* Chinese tech companies go from "trading at a titanically expensive multiple of earnings" to "trading at a truly monstrously expensive multiple of earnings"; or,
* Chinese property companies manage to keep the Ponzi going. I have a few acquaintances who look at this stuff and none of them can figure out how the Chinese property sector hasn't imploded yet.

Do you have a view on these things? These are the drivers of the Chinese stock market; "China is going to emerge!" has been trapping people in an underperforming market for decades.

---

Secondly, do you want a China-specific ETF, or do you want HK and Taiwanese equities in your ETF as well?

Thirdly, do you have to have the onshore A-shares, or are you OK with the offshore H-share listings as well? (Pro tip: the answer is always "the H-shares are fine", because A-shares tend to trade at a premium that means you pay 15% more for the exact same thing.)

Anyway. Answer those and we can point you to the right way to do this.

 

[chrisloh65]

Using your logics, it is also questionable why anybody would be buying over-priced and risky S&P500 index ETFs and IWDA index ETF (which contains >60% of US S&P500 stocks) because:

* US banks are heavily over-leveraged, and any bank-run will render them collapsing! Given that US banks are privately run, they will not be bailed out by USA Government because USA Gov claimed that any Gov must not interfere in private market and zombie companies must be allowed to fail! (Ok, you may argue that this is not true in 2009 in USA, which then points to the fact that USA and USA Gov are full of hypocrites who do not eat what they "cooked" up!).
This is unlike China banks which are mostly state-owned and China Gov has a responsibility to bail out state-owned banks!

* US tech companies are already "trading at a truly monstrously expensive multiple of earnings" (NOT "trading at a titanically expensive multiple of earnings")! These companies have very heavy weightage in S&P500 and IWDA and you still asking people to buy IWDA and DCA blindly at such "monstrously expensive multiple of earnings"?!
You should hear from the expert's mouth here (real expert, not those fake "self-proclaimed" experts here in HWZ) about this monstrous stock market bubble!:

https://www.marketwatch.com/story/s...the-real-mccoy-this-is-crazy-stuff-2020-06-17

* USD and US T-Bills are the biggest ponzi scheme of all time! US Gov do not have the ability to repay all their T-Bills with real assets (not toilet paper USD) but are still issuing them like no tomorrow, and printing USD like printing toilet papers! That is why finance experts believe that USD crash is just a matter of time!
You can hear from the expert's mouth here (real expert, not those fake "self-proclaimed" experts here in HWZ):

https://www.cnbc.com/2020/06/15/dol...evitable-asia-expert-stephen-roach-warns.html


Need I say more? It is clear that Shiny Things are biased and anti-China, propagating the same anti-China propaganda like those White Western Media and their Gov officials!

Well, in fact, these White people and their allies (usually bribed by USA CIA) have been singing "The Coming Collapse of China" (see book by AMERICAN lawyer Gordon G. Chang) since 2001! People should just go to read this book yourself to remind yourself these kind of propoganda since 2001 and now is 2020!

And propogating another ponzi investment scheme like "DCA blindly into index ETF regardless of market conditions" to benefit early adopters is another story for another day!

We get this question A LOT, and there isn't one clean answer. (Incidentally, why is it always China? I get "how do I invest in China ETF?" even more than I get "how do I invest in US stocks?".)

Firstly, are you sure you want to do this? When you buy a China ETF instead of a global ETF, you're betting that the Chinese stock market will outperform the MSCI World. For that to happen, one of three things has to happen:

* Chinese banks manage to work themselves out from under their GARGANTUAN pile of bad loans; or,
* Chinese tech companies go from "trading at a titanically expensive multiple of earnings" to "trading at a truly monstrously expensive multiple of earnings"; or,
* Chinese property companies manage to keep the Ponzi going. I have a few acquaintances who look at this stuff and none of them can figure out how the Chinese property sector hasn't imploded yet.

Do you have a view on these things? These are the drivers of the Chinese stock market; "China is going to emerge!" has been trapping people in an underperforming market for decades.

---

Secondly, do you want a China-specific ETF, or do you want HK and Taiwanese equities in your ETF as well?

Thirdly, do you have to have the onshore A-shares, or are you OK with the offshore H-share listings as well? (Pro tip: the answer is always "the H-shares are fine", because A-shares tend to trade at a premium that means you pay 15% more for the exact same thing.)

Anyway. Answer those and we can point you to the right way to do this.

You ask the wrong person because Shiny here is anti-China, claiming that China banks and China are full of bad debts that their collapse is a matter of time.

However, the truth is any bank that faces bank-run, even those biggest banks in USA like JP Morgan, Citibank, BOA, etc., all of them would collapse if most of their customers go to the banks to withdraw their cash deposits! Also USA has printed so much paper money USD and so much in debt issuing so much T-Bills that USA collapse is a matter of time! (but this fact Shiny never tell us here!)

From above you can see the biasedness?

Hi Shiny, thanks for the reply. I understand that China has less than ideal accounting and there are risks. But not all their companies are frauds and i think in the longer run, they still have much potential to grow. They will still be a major economic anchor in Asia, just my thoughts.