ETF Risk Report: CHIK Buyer Beware: Every ETF Holds the Full Risk of Its Underlying Equities Disclosures in the Best Interest of Investors
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ETF Risk Report: CHIK Buyer beware: Every ETF holds the full risk of its underlying equities Disclosures in the best interest of investors Global X MSCI China Information Technology ETF Gray Swan Event Risks exist for every equity held by CHIK. Gray swan events include accounting fraud, management failures, failed internal controls, M&A problems, restatements, etc. These risks occur infrequently, but Gray Swan Event Factor for CHIK 2.70% consistently for all equities. Equities account for 100.01% of CHIK’s assets. Most investors ignore these risks until after they are disclosed; whereupon a stock’s price drops precipitously. Just as insurance companies can predict likely costs for a driver’s future car accidents based on the driver’s history, Watchdog Research contacts each ETF asking how they notify investors about we predict the likely cost (price drop) for CHIK following accounting governance risks in equities in their fund. We will publish their response gray swan disclosures within its holdings. The expected when received. price decrease across the CHIK equity portfolio is 2.70%. However, individual equity risks vary signicantly. This report helps investors know their risk exposure. Inception Date: 12/07/2020 Year-to-Date Return: -9.87% Passively managed, the fund tracks the MSCI China Information Technology 10/50 Index, which tracks the Net Assets: $36m 1-Year Return: 66.90% performance of companies in the information technology sector. This index is a free oat adjusted market Price: $30.32 3-Year Return: NA capitalization weighted index designed to measure the Net Asset Value (NAV): $30.02 5-Year Return: NA performance of securities that are classied as operating in China and that satisfy minimum market capitalization Net Expense Ratio: 0.66% Yield: 0.74% and liquidity thresholds. The index is reconstituted and re- weighted quarterly. As of: 03/31/2021 Company Ticker Held Current GSEF Category Value Top Holdings by Value Sunny Optical Tech 2382 Long - NA $4.43m This table shows Gray Swan Event Factors for the top ten equity holdings by dollar-value, as of Sep 24, 2021. Xiaomi Corp Class B... 1810 Long - NA $3.46m Investors should invest in ETFs only when they adequately Xinyi Solar Holding... 968 Long - NA $2.16m understand an ETF’s risks. Buyer beware. ETF prospectuses generally acknowledge that ETF managers Kingdee Internation... 268 Long - NA $1.9m do NO traditional risk analysis on equities in their fund. Lenovo Group Ltd 992 Long - NA $1.79m Our Gray Swan Event Factors are meant to inform investors of signicant traditional accounting and Gds Holdings Ltd. GDS Long 2.69% Mid $1.55m managerial risks for the equities in each ETF. Aac Technologies Ho... 2018 Long - NA $1.31m ETF Risk Reports are published quarterly on dedicated Kingsoft Corp Ltd 3888 Long - NA $1.22m platforms like Factset, Renitiv, Capital IQ etc. Weekly updates are available for a paid subscription. Byd Electronic Intl... 285 Long - NA $1.13m For more details contact: [email protected] Longi Green Energy ... 601012 Long - NA $1.1m Company Ticker Held Current GSEF Category Value Riskiest Holdings 21vianet Group, Inc. VNET Long 2.79% Mid $405k This table shows the individual Gray Swan Event Factors for this ETF’s most at-risk equities as of Sep 24, 2021. Gds Holdings Ltd. GDS Long 2.69% Mid $1.55m The average equity GSEF across 6,500 public equities is Oneconnect Fiancial... OCFT Long 2.67% Mid $238k 1.25%. Equities with a GSEF between 5% and 10% are considered high risk. Equities with a GSEF above 10% are Daqo New Energy DQ Long 2.67% Mid $699k extreme risks. Gray Swan Event Factors are derived from skilled analysts Sunny Optical Tech 2382 Long - NA $4.43m charting 15 years of negative gray swan event disclosures Xiaomi Corp Class B... 1810 Long - NA $3.46m against stock price declines following such disclosures. A Gray Swan Event Factor is an assessment of the Xinyi Solar Holding... 968 Long - NA $2.16m likelihood of, and 12-month price risk for, gray swan Kingdee Internation... 268 Long - NA $1.9m events for each equity. Lenovo Group Ltd 992 Long - NA $1.79m Aac Technologies Ho... 2018 Long - NA $1.31m Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 This table lists the equity holdings for Global X MSCI China Information Technology ETF ranked by highest GSE Factor (riskiest rst). We list all equities (US and foreign) for this ETF. However, some foreign listings only show via a ticker. To further evaluate risks, you can access details for each company by opening its Brief Watchdog Report available for viewing and pdf download. The report is free to readers for their personal consumption and it includes the executive summary data pulled from the full Watchdog Report. To learn more about the full Watchdog and GSEF Reports go to last page or visit watchdogresearch.com. Company Access Details Ticker Held Current GSEF Category Value 21vianet Group, Inc. Watchdogresearch.com/watchdog/$VNET VNET Long 2.79% Mid $405k Gds Holdings Ltd. Watchdogresearch.com/watchdog/$GDS GDS Long 2.69% Mid $1.55m Oneconnect Fiancial Technology Co., Ltd. Watchdogresearch.com/watchdog/$OCFT OCFT Long 2.67% Mid $238k Daqo New Energy Watchdogresearch.com/watchdog/$DQ DQ Long 2.67% Mid $699k Sunny Optical Tech - 2382 Long - NA $4.43m Xiaomi Corp Class B Common Stock - 1810 Long - NA $3.46m Usd.0000025 Xinyi Solar Holdings Ltd - 968 Long - NA $2.16m Kingdee International Sftwr - 268 Long - NA $1.9m Lenovo Group Ltd - 992 Long - NA $1.79m Aac Technologies Holdings In - 2018 Long - NA $1.31m Kingsoft Corp Ltd - 3888 Long - NA $1.22m Byd Electronic Intl Co Ltd - 285 Long - NA $1.13m Longi Green Energy Technol A - 601012 Long - NA $1.1m Kingboard Holdings Ltd - 148 Long - NA $902k Luxshare Precision Industr A - 002475 Long - NA $842k Weimob Inc - 2013HK Long - NA $782k Hua Hong Semi - 1347 Long - NA $773k Zte Corp H - 763 Long - NA $711k Kingboard Laminates Hldg /Hkd/ - 1888 Long - NA $608k China Youzan Ltd - 8083 Long - NA $602k Travelsky Technology Ltd H - 696 Long - NA $601k Will Semiconductor Ltd A - 603501C1 Long - NA $584k Boe Technology Group Co Lt A - 000725 Long - NA $569k Sanan Optoelectronics Co L A - 600703 Long - NA $523k Iytek Co. Ltd. Class A - 002230 Long - NA $509k Goertek Inc A - 002241 Long - NA $505k Lens Technology Co Ltd A - 300433 Long - NA $422k Kingsoft Cloud Holdings Limited Watchdogresearch.com/watchdog/$KC KC Long - NA $421k Ming Yuan Cloud Group Holdings Ltd - 909 Long - NA $398k Hundsun Technologies Inc A - 600570 Long - NA $392k Zte Corp. Class A - 000063 Long - NA $363k Agora, Inc. Watchdogresearch.com/watchdog/$API API Long - NA $346k Yonyou Network Technology A - 600588 Long - NA $328k Maxscend Microelectronics A - 300782C2 Long - NA $307k Wuxi Lead Intelligent Equ - 300450 Long - NA $305k Naura Technology Group Co A - 2371 Long - NA $290k Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 Company Access Details Ticker Held Current GSEF Category Value Gigadevice Semiconductor B A - 603986 Long - NA $269k Zhejiang Dahua Technology A - 002236 Long - NA $265k Flat Glass Group Co Ltd - 6865 Long - NA $262k Chaozhou Three Circle Group Co Ltd - 300408 Long - NA $257k Wingtech Technology Co Ltd A - 600745C1 Long - NA $254k Tianjin Zhonghuan Semicond A - 002129 Long - NA $235k Sangfor Technologies Inc A - 300454 Long - NA $219k Chindata Group Holdings Ltd Cd - CDUS Long - NA $209k Unigroup Guoxin Co Ltd A - 002049 Long - NA $190k Avic Jonhon Optronic Tech A - 2179 Long - NA $176k Guangzhou Shiyuan Electron A - 002841 Long - NA $173k Foxconn Industrial Interne A - 601138 Long - NA $168k Hangzhou First Applied Mat A - 603806 Long - NA $159k Tianma Microelectronics A - 50 Long - NA $146k Hangzhou Silan Microelectr A - 600460 Long - NA $140k Ninestar Corp A - 002180 Long - NA $136k Wuhan Guide Infrared Co Lt A - 2414 Long - NA $131k Thunder Software Technolog A - 300496 Long - NA $130k Zhejiang Jingsheng Mechani A - 300316 Long - NA $130k Yealink Networ A - 300628C2 Long - NA $127k Suzhou Dongshan Precision A - 2384 Long - NA $127k Unisplendour Corp. Ltd. Class A - 000938 Long - NA $126k Shenzhen Goodix Technology Co. Ltd. Class - 603160 Long - NA $125k A Beijing Shiji Information A - 002153 Long - NA $123k Sg Micro Corp A - 300661C2 Long - NA $123k Jiangsu Changjiang Electronics Technology - 600584 Long - NA $121k Co. Ltd. Class A Guangdong Ly Intelligent M A - 002600 Long - NA $119k 360 Security Technology In A - 601360 Long - NA $116k Shanghai Baosight Software A - 600845 Long - NA $111k Dhc Software Co Ltd A - 002065 Long - NA $110k Shennan Circuits Co Ltd A - 002916 Long - NA $108k Shengyi Technology Co Ltd A - 600183 Long - NA $107k Olm Group Co Ltd A Common Stock - 002456 Long - NA $101k Cny1.0 Ja Solar Technology Co Ltd A Common - 002459C2 Long - NA $97.8k Stock Guangzhou Haige Communicat A - 002465 Long - NA $97.7k Tianshui Huatian Technology Co. Ltd. Class - 2185 Long - NA $89.8k A China Greatwall Technology A - 66 Long - NA $83.8k Ingenic Semiconductor Co. Ltd. Class A - 300223 Long - NA $79.7k Inspur Electronic Informat A - 000977 Long - NA $78.6k Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 Company Access Details Ticker Held Current GSEF Category Value Shenzhen Sc New Energy Technology Corp. - 300724 Long - NA $75.4k Class A Grg Banking Equipment Co A - 002152 Long - NA $59.5k Addsino Co Ltd A - 547 Long - NA $58.1k Shenzhen Kaifa Technology A - 21 Long - NA $57.2k Tongfu Microelectronics Co. Ltd. Class A - 2156 Long - NA $56.6k Shenzhen Sunway Communication Co.