Overview of TIGER China CSI300
TIGER China CSI300 is an index fund operated by Mirae Asset Securities, established on May 2, 2014. It is one of Korea’s leading ETFs tracking the CSI300 index, an index published by the China Securities Index (CSI). This ETF primarily invests in Chinese mainland stocks, derivatives, and master investment trusts.
The CSI300 index comprises 300 selected stocks listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange, chosen based on market capitalization, liquidity, financial stability, and other criteria. The index composition is adjusted in January and July each year.
Composition of TIGER China CSI300
TIGER China CSI300 ETF allocates its investments in a 7:3 ratio between the Shanghai Composite Index and the Shenzhen Composite Index. With a total market capitalization of 285.1 billion KRW, it is ranked second among overseas equity ETFs listed on the Korean stock exchange.
While it has a relatively high annual expense ratio of 0.63%, many investors hold it due to the diversified exposure to the Chinese stock market.
- The ETF heavily invests in financial sector stocks listed on the Chinese stock market.
- It also includes investments in consumer goods, real estate, and other sectors.
- As of April 15, 2021, the ETF holds a total of 307 stocks.
Issues with TIGER China CSI300
Since this is an index fund tracking the CSI300, it comes with a few inherent issues:
- No Currency Hedging (Foreign Exchange Exposure)
- This ETF does not implement currency hedging, meaning its price fluctuates not only based on the stock performance of its 307 holdings but also due to exchange rate movements of the Chinese Yuan (CNY).
- If the Yuan depreciates, the ETF’s return will decrease.
- Lack of Well-Known Chinese Stocks
- The ETF does not include globally recognized Chinese companies like Alibaba, Baidu, or Tencent, as these are mainly listed in Hong Kong (Hang Seng) or the U.S. (Nasdaq).
- Investors looking for exposure to these major Chinese tech stocks should consider U.S.-listed ETFs like ‘MCHI’ or the ‘TIGER China Hang Seng Tech ETF’ instead.
Conclusion
TIGER China CSI300 provides diversified exposure to various Chinese companies but does not include globally recognized Chinese stocks. Instead of purchasing it individually, it may be more suitable as part of a personal pension savings plan or a long-term investment portfolio.
