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New ETF from Claymore Looks East

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Just in time for the surging performance of emerging market stocks is a new ETF that aims to capitalize on the trend. In late October, Claymore Securities launched the Claymore/AlphaShares China All-Cap ETF (YAO), which aims to deliver complete exposure to the Chinese stock market. YAO includes not just large-cap stocks but mid and small caps as well.

“Since the launch of TAO in 2007, Claymore has been committed to providing comprehensive access and products for the Chinese markets,” said Christian Magoon, president of Claymore Securities. “Where our earlier products have given investors the opportunity for portfolio diversification, YAO offers direct exposure to China’s broader stock market.”

YAO is benchmarked to the AlphaShares China All Cap Index. It employs a modified market cap weighting strategy and is free float adjusted. At the end of September, the index had 99 holdings. Large-cap stocks accounted for 57 percent of the index, with mid-cap stocks at 33 percent and small stocks at 10 percent.

Investments in Chinese stocks by foreign investors are currently restricted by the Chinese government to Hong Kong (HK)-listed shares, including H-shares and Red Chips.

Other popular Chinese ETFs include the iShares FTSE/Xinhau China 25 ETF (FXI) and the SPDR S&P China ETF (GXC). FXI focuses on the largest 25 Chinese stocks, whereas GXC has a similar all-cap strategy as YAO. Over the past 20 years, China’s GDP has become a larger or more significant contributor to the world economy.

According to the prospectus, YAO charges annual expenses of 0.70 percent and the fund will join Claymore’s roster of other Chinese focused funds. The company also manages the Claymore/AlphaShares China Small Cap Index ETF (HAO) and the Claymore/AlphaShares China Real Estate ETF (TAO).