As investors' gaze increasingly turns to China, competition over who can capitalize on the country's burgeoning economic potential is heating up. New York-based Global X Management dove into the fray on Tuesday with the launch of the China Consumer ETF and China Industrials ETF.

Designed to offer targeted access to the Chinese consumer and industrial markets, the consumer ETF aims to replicate the S-BOX China Consumer Index, while the industrials ETF seeks to replicate the S-BOX China Industrials Index. These funds round out Global X's family of China sector ETFs, which include an energy, financials, materials, and technology ETF.

In a company statement, Global X Management cited the attractiveness of the strong economic climate in these sectors and in China overall, as evidenced by the 16.2 percent increase in retail sales during October from a year earlier.

“China is an incredibly efficient manufacturing hub for the world, as well as the main source of growth in global consumer demand,” stated Bruno del Ama, chief executive officer of Global X Management. “The China Industrials ETF and China Consumer ETF provide efficient and diversified access to these China manufacturing and consumption themes.”

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Company Press Release

China Consumer ETF and China Industrials ETF Start Trading on the NYSE Arca

NEW YORK, Dec. 1 //PRNewswire// -- New York-based asset manager Global X Management Company today launched the Global X China Consumer ETF (NYSEArca: CHIQ) and Global X China Industrials ETF (NYSEArca: CHII). These are the first ETFs globally that offer investors targeted access to the rapidly growing China Consumer and Industrial sectors.

The Global X China Consumer ETF seeks to replicate the S-BOX China Consumer Index, which is designed to reflect the performance of the consumer sector in China. As of October 30, 2009, the largest stocks in the Consumer index were food & beverage companies Tingyi and Want Want China, automobile company Dongfeng Motor Group, department store firm Parkson Retail Group, and sports apparel company Li Ning.

Chinese President Hu Jintao recently said that the government is focused on expanding domestic spending, "especially consumer demand." In October, China's retail sales jumped 16.2% from a year earlier.(i) And there is significant room for continued growth: according to Morgan Stanley, "the incremental contribution of Chinese consumers in USD terms to the global consumption of tradable goods started to exceed that of the US in 2007." (ii) This trend is expected to continue as consumer spending currently accounts for only 36% of China's GDP, about half the level of the U.S.

The Global X China Industrials ETF seeks to replicate the S-BOX China Industrials Index, which is designed to reflect the performance of the industrial sector in China. As of October 30, 2009, the largest stocks in the Industrials index were diversified industrial manufacturer BYD Company, infrastructure groups China Communications Construction and China Railway Group, industrial shipping and logistics services company China COSCO Holdings, and building materials firm China National Building Material Group.

China is also spurring its industrials sector with a $580 billion stimulus package directed towards construction, railways, subways and airports. In October, China's industrial output rose 16.1% from a year earlier. (i) According to economic forecasting firm IHS Global Insight, China will overtake the U.S. as the world's largest manufacturer by 2015.

"China is an incredibly efficient manufacturing hub for the world, as well as the main source of growth in global consumer demand," said Bruno del Ama, CEO of Global X Management. "The China Industrials ETF and China Consumer ETF provide efficient and diversified access to these China manufacturing and consumption themes."

These ETFs are part of a family of China sector ETFs, which also includes the China Energy ETF (ticker: CHIE), China Financials ETF (ticker: CHIX), China Materials ETF (ticker: CHIM), and China Technology ETF (ticker: CHIN). These other China sector ETFs are not yet available for purchase.

About Global X Management Company, LLC

Global X Management Company, LLC, a New York-based asset manager, serves as the investment adviser to Global X Funds. The firm, registered as an investment adviser with the Securities and Exchange Commission, specializes in innovative international ETFs. For more information, visit www.globalxfunds.com .

 

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