China ETF

China has been one of the biggest stories of the past couple decades and will continue to be a driving economic force for the forseeable future.  The longest trading China focused ETF is EWH which is based on the Hong Kong index, so we will use this at our starting benchmark.

EWH - iShares MSCI Hong Kong Index ETF is designed to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Hong Kong market, as measured by the MSCI Hong Kong index. This Hong Kong based ETF began trading on March 12, 1996 and remains a very popular investment vehicle.

Annual Expense Ratio = .55% ( 55 Basis Points )

As of 11/03/2010 there were $1.57 Billion of Net Assets and the average daily trading volume was 6,385,850 which makes this a very liquid ETF but is about 1/3 the volume in FXI. In dollar volume it's only about 1/6 of the average trading volume.

When you look at performance since inception versus the S&P 500 you can see that Hong Kong has underperformed due to the 1998 asian currency crisis. Since the 2003 market bottom EWH has outperformed the S&P 500.

Chart begins on EWH first trading day 3/12/1996

FXI - iShares FTSE Xinhua China 25 Index is designed to replicate the price and yield performance, before fees and expenses, of the FTSE / Xinhua China 25 index.  As the name implies this ETF is focused on the 25 largest and most liquid Chinese companies.  It began trading on October 5, 2004 and has become a giant with approximately $8.2 Billion in assets.  Roughly 65% of the portfolio are in the Financial Services, Energy and Telecommunications sectors.

Annual Expense Ratio = .73% ( 73 Basis Points )

As of 11/03/2010 there were net assets of approximately $8.2 Billion and daily average trading volume exceeded 18 million shares making it an extremely active ETF.

Since we were entering a bull market for emerging markets at the time FXI began trading you will see the performance comparison vs the S&P 500 looks much more impressive. I included EWH as well to provide some context to this performance, you can see that FXI has outperformed both of them by a wide margin.

FXI Performance Since Inception VS EWH and the S&P 500 Index

Chart begins on the first trading day of FXI  10/05/2004

GXC - SPDR S&P China ETF is designed to replicate as closely as possible, before fees and expenses, the total return performance of S&P China BMI index based upon the Chinese equity market.  The top 3 sectors in GXC are the same as for FXI but there is a little less concentration and a little more exposure to Industrial Materials and Consumer Goods.  There are also a wider number of holdings.

Annual Expense Ratio = .59%  ( 59 Basis Points )

As of 11/01/2010 the net assets were $557 Million and the average daily trading volume was 116,000 shares which is miniscule compared to FXI.  However, when you look at the performance on the chart below you can see that it has started to outperform FXI in the past year so it's definitely worth investigating.

GCX Performance Since Inception VS FXI 

 
Chart begins on first trading day of GCX March 19, 2007