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 signi cantly. 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 classi ed 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 signi cant 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, Re nitiv, 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
I ytek 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
O lm 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. Ltd. - 300136 Long - NA $55k Class A
Avary Holding Shenzhen Co A - 2938 Long - NA $54.4k
China National Software A - 600536 Long - NA $53.8k
Universal Scienti c Industrial Shanghai Co. - 601231 Long - NA $51.8k Ltd. Class A
Gcl System Integration Tec A - 2506 Long - NA $51.5k
Zhongji Innolight Co Ltd A - 300308 Long - NA $51.3k
Tianjin712 Communication & A - 603712 Long - NA $50.3k
Wus Printed Circuit Kunsha A - 2463 Long - NA $48.4k
China Transinfo Technology A - 2373 Long - NA $47k
Fiberhome Telecom Tech Co A - 600498 Long - NA $45.8k
Raytron Technology Co Ltd A - 688002C1 Long - NA $42k
Montage Technology Co Ltd A - 688008C1 Long - NA $41.5k
Beijing Bdstar Navigation Co. Ltd. Class A - 2151 Long - NA $41.3k
Huagong Tech Co Ltd A - 988 Long - NA $41.1k
Flat Glass Group Co Ltd A Common Stock - 601865C1 Long - NA $41k Cny1.0
Lakala Payment Co. Ltd. Class A - 300773 Long - NA $39.8k
Beijing Sinnet Technology Co. Ltd. Class A - 300383 Long - NA $39k
Leyard Optoelectronic Co. Ltd. Class A - 300296 Long - NA $38.4k
Shenzhen Sunlord Electron - 2138 Long - NA $37.2k
China Railway Signal & Com A - 688009C1 Long - NA $36.5k
Wuhu Token Science Co Ltd A - 300088 Long - NA $34.3k
Beijing Yuanliu Hongyuan E A Common - 603267C1 Long - NA $33.7k Stock Cny1.0
Beijing E Hualu Information Technology Co. - 300212 Long - NA $28.5k Ltd. Class A
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 This is a story about four people investing in ETFs. They are named Everybody, Somebody, Anybody and Nobody.
Everybody wanted to buy ETFs because ETFs are such great investments. “Not so fast,” said Somebody. “Nobody should buy an ETF without rst understanding the accounting and disclosure risks for the ETF’s basket of stocks.”
Everybody scoffed: “Don’t be silly! What could go wrong? Let’s just BUY immediately! Somebody at the ETF must have done that work for us.” Anybody explained how Everybody was wrong in their thinking: “Most ETF prospectuses speci cally say Nobody at the ETF actually does traditional stock risk analysis.” Everybody read many ETF prospectuses, and, sure enough, Anybody was right! So, while Everybody should know the risks before buying an ETF, Nobody was actually doing it.
Until this report was created.
Watchdog Research, Inc. educates investors on accounting and disclosure risks.
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