ETF exposure
The Global X China Consumer ETF (CHIQ) allows investors to tap the growing Chinese consumer through investment in retail through retail, food, consumer services, and automobiles sector. It seeks to track the performance of the Solactive China Consumer Total Return Index. Its top holdings are Galaxy Entertainment Group (GXYEF), Geely Automobiles (GELYF), JD.Com (JD), Alibaba (BABA) and Techtronic Industries (TTNDY).
As on April 18, it has a market capitalization of $76 million. Shares of CHIQ have gained 18% year to date as talks of a trade war between China and the United States are looming. Escalation of trade tensions between the two countries could significantly boost China’s domestic retail stocks.
Fund flows
So far during the year, investors have pulled out $1.8 million from the CHIQ fund. In 2016, investors withdrew $12.4 million from the CHIQ ETF as concerns of a Chinese slowdown spooked investors and led to the flight of capital to western economies.
Change in institutional investors holdings
Negative flows to the CHIQ ETF corresponds with the decline in trade activity of investors as seen by the 13F filings of major institutional asset managers for the fourth quarter.
In 4Q16, trade activity by 13F filers displays a 10.5% growth in aggregate shares held by institutional investors and hedge funds. Among the 20 13F filers holding the stock, 5 funds reduced their exposure to CHIQ, while 6 funds sold all their holdings of the ETF. In contrast, 1 fund created new positions and 7 funds increased their exposure to the CHIQ ETF.
Major institutional asset management firms like Citadel Advisors, Psagot Investments, Goldman Sachs (GS), Old Mission Capital and Royal Bank of Canada (RY) were the top net buyers of the CHIQ ETF. Meanwhile, institutions like Creative Planning, FIS Group and Wells Fargo (WFC) sold their holdings of CHIQ during the fourth quarter. Among these, FIS Group and Creative Planning liquidated all its exposure to CHIQ, while the others just reduced their holdings.
