China
China equities are running higher, mostly lead by Alibaba, but a broad tech run is under way. I cover some of the details here. Below we look at the two JSE listed China ETFs.
Sygnia launched a new ETF covering China in April 2022 (JSE code: SYGCN). With the Satrix China ETF (JSE code: STXCHN) from August 2020, we now have two ETFs covering the same region and it’s worth looking at the differences.
The first key point is that they use different indices to track China. If the underlying indices were the same then the choice between the two simple becomes one of TER.
Sygnia uses the “S&P New China Sectors Index. The S&P New China Sectors Index measures the performance of China and Hong Kong-domiciled companies in consumption- and service-oriented industries. All Chinese share classes, including A-shares and offshore listings, are eligible for inclusion”
Satrix uses ” MSCI China Index captures large and mid-cap representation across China A shares, H shares, B shares, Red chips, P chips and foreign listing (e.g ADRs) and covers about 85% of China equity universe”
So the Sygnia ETF is slightly more niche in that it focuses on services and consumption whereas the Satrix index is all sectors.
As for the TIC, Sygnia is 0.6% while the Satrix is 0.63% so no real difference.
Both ETFs have Tencent as the largest holding followed by Alibaba, but in different weightings with the rest of the top 10 again largely the same but again different weighting.
The question then of course is which is better? I like the Sygnia focus on services and consumption but the difference really is so slight and certainly one will do better then the other over time, just that we have no way of knowing which one it’ll be.
Recently it has been the Satrix moving ahead and maybe that tells us a little about the composition of the ETF?
Satrix & Sygnia China ETFs as at close 12 February 2025
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ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.