CQQQ - China tech ETF

CQQQ may be a better way to get exposure to China technology companies and participate in Chinese economy, some of the key aspects of this ETF -

  • This is an index fund, Alphashares China technology index

    AlphaShares China Technology Index is designed to measure and monitor the performance of publicly issued common equity securities of publicly traded companies that are open to foreign ownership and derive a majority of their revenues from the information technology sector (as defined by Standard & Poor’s Global Industry Classification Standard) in China or the Special Administrative Regions of China, such as Hong Kong and Macau

  • Only the Chinese companies based in mainland China, Hong Kong or Macau

    (a) Companies based in mainland China, Hong Kong or Macau are eligible for inclusion in the Index. For purposes of the Index, companies are considered to be based in mainland China, Hong Kong or Macau if they are so classified under the S&P BMI Country Code classification system. (b) In addition to the foregoing criteria, companies based in Hong Kong or Macau are only eligible for inclusion in the Index if they derive a majority of their revenue from mainland China, Hong Kong or Macau.

  • Greater than $200m market capitalization is minimum to be included in the index

    To ensure adequate liquidity, constituents must have a float-adjusted market capitalization of $200 million or greater for initial inclusion in the Index. A floata-djusted market capitalization of $150 million or greater at the time of each rebalance is required for ongoing inclusion in the Index.

  • Weightage - two-tiered float-adjusted market capitalization weighting methodology

    The Index employs a two-tier weighting system with the target weight of any one position limited to a maximum of either 10.0% or 4.0% of the Index at the time of each rebalance. To determine the target weights, all positions whose float-cap adjusted weights are over 5% are added together. If the total is greater than 40%, then the highest weighted position is capped at 10%. The excess weight is then applied on a pro-rata basis to all the remaining Index constituents and the process is then repeated, if necessary, with the next largest stock being capped at 9% (8% and so on) until the 40% is reached. The 4.0% maximum target weight is then applied to all the remaining Index constituents. Once set, target weights are free to float due to market actions.

  • Number of securities is 71 as of 11/3/2017. As expected, Biggest holdings (as of 11/3/2017) are Tencent (11.87%) and Alibaba (11.17%), you can view their holdings here
  • Expense ratio is 0.70%

You can read all further details here.

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