The key is to scope out ETFs that allow the inclusion of China “N-shares.” With regard to major global indices, that means sniffing out ETFs based on S&P emerging markets indexes, since the S&P BMI indexes include N-shares.
Immediately coming to mind within the China space is the $983 million SPDR S&P China ETF (GXC | B-43) and the PowerShares Golden Dragon China ETF (PGJ | A-23). GXC is a comprehensive “offshore” China ETF, while PGJ is only eligible to hold U.S.-listed N-shares.
For those looking for quick access to Alibaba in a China-specific fund, your best bet will probably be the KraneShares CSI China Internet ETF (KWEB | B-23), which just surpassed the $100 million in assets mark. According to KraneShares’ website, Alibaba could be added to KWEB as soon as 11 days after its IPO.
I’ve put together the three largest emerging market ETFs and the three largest China ETFs that should be, and likely won’t be, eligible to include Alibaba:
|Top 3 Eligible EM ETFs||AUM ($M)|
|*ECON - EGShares EM Consumer||1,330|
|**FEM - First Trust EM AlphaDex||468|
|GMM - SPDR S&P EM||275|
|*Depending on classification outcome|
|**Depending on AlphaDex methodology|
|Top 3 Ineligible EM ETFs||AUM ($M)|
|VWO - Vanguard FTSE EM||50,290|
|EEM - iShares MSCI EM||43,920|
|IEMG - iShares Core MSCI EM||5,610|
|Top 3 Eligible China ETFs||AUM ($M)|
|GXC - SPDR S&P China||983|
|PGJ - PowerShares Golden Dragon China||310|
|KWEB - KraneShares CSI China Internet||103|
|Top 3 Ineligible China ETFs||AUM ($M)|
|FXI - iShares China Large Cap||5,940|
|MCHI - iShares MSCI China||1,160|
|ASHR - DBX Harvest CSI 300 China A-Shares||434|
Note: This should only be used as a guide, as methodologies can change in the coming months.