ETFs Focused on China Fall on Trade Concerns

By Francesca Fontana

A number of exchange-traded funds with high exposure to China fell sharply Monday after U.S. President Donald Trump suggested via Twitter he could ramp up U.S. tariffs on $200 billion in Chinese imports to 25% from the current 10%.

Among the ETFs trading lower were iShares China Large-Cap ETF (FXI), Invesco Golden Dragon China ETF (PGJ), and First Trust Chindia ETF (FNI).

The BlackRock-issued FXI tracks an index of the 50 largest and most liquid Chinese stocks traded on the Hong Kong Stock Exchange, according to ETF.com. Among its top ten holdings are Tencent Holdings Ltd., China Construction Bank Corp., and Ping An Insurance Company of China Ltd. FXI fell 2.9% to $43.62, according to FactSet.

PGJ, issued by Invesco, tracks a market-cap-weighted index of Chinese stocks and strictly holds U.S.-listed companies that derive a majority of their revenues in China, according to ETF.com. Its top ten holdings include Ctrip.com, NetEase Inc., and JD.com Inc. PGJ fell 3.6% to $41.05.

FNI, issued by First Trust, tracks an index of stocks from China and India screened by market cap and weighted in tiers, according to ETF.com. Among its top ten holdings are JD.com Inc., Alibaba Group Holding Ltd., and HDFC Bank Ltd. FNI fell 2.8% to $37.39.

Stock markets in the U.S., Europe and Asia slid after the announcement, as investors became increasingly concerned about the outcome of this week's scheduled trade talks. The Dow Jones Industrial Average fell 0.8% to 26285, while the S&P 500 lost 0.9%. Ten of the 11 S&P 500 sectors dropped, led by declines in materials and technology, which have heavy exposure to China.

Write to Francesca Fontana at [e-mail]

(END) Dow Jones Newswires

May 06, 2019 11:21 ET (15:21 GMT)

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