ETF Risk Report: CHIQ Buyer beware: Every ETF holds the full risk of its underlying equities Disclosures in the best interest of investors
Global X MSCI China Consumer Disc ETF Gray Swan Event Risks exist for every equity held by CHIQ. 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 CHIQ 2.88% consistently for all equities. Equities account for 99.84% of CHIQ’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 CHIQ 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 CHIQ equity portfolio is 2.88%. However, individual equity risks vary signi cantly. This report helps investors know their risk exposure.
Inception Date: 11/30/2020 Year-to-Date Return: -5.90% The fund tracks the performance of companies in the MSCI China Index that are classi ed in the consumer Net Assets: $673m 1-Year Return: 107.22% discretionary sector. This index is a free oat-adjusted market capitalization weighted index designed to measure Price: $33.48 3-Year Return: 22.97% the performance of securities that are classi ed as Net Asset Value (NAV): $33.21 5-Year Return: 25.89% operating in China according to the MSCI Global Investable Markets Index Methodology and that satisfy Net Expense Ratio: 0.65% Yield: 0.05% minimum market capitalization 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
Meituan Dianping Cl... 3690 Long - NA $90.5m This table shows Gray Swan Event Factors for the top ten equity holdings by dollar-value, as of Sep 24, 2021. Alibaba Group Holdi... 9988 Long - NA $77m Investors should invest in ETFs only when they adequately Nio Inc. NIO Long 4.11% Mid $65.4m understand an ETF’s risks. Buyer beware. ETF prospectuses generally acknowledge that ETF managers Jd.Com, Inc. JD Long 3.10% Mid $59.7m do NO traditional risk analysis on equities in their fund. Pinduoduo Inc. PDD Long 2.59% Mid $47.4m Our Gray Swan Event Factors are meant to inform investors of signi cant traditional accounting and Li Ning Co Ltd 2331 Long - NA $32.6m managerial risks for the equities in each ETF.
Anta Sports Product... 2020 Long - NA $30.4m ETF Risk Reports are published quarterly on dedicated Yum China Holdings,... YUMC Long 0.57% Low $30.2m platforms like Factset, Re nitiv, Capital IQ etc. Weekly updates are available for a paid subscription. Byd Co Ltd H 1211 Long - NA $29.6m For more details contact: [email protected] Shenzhou Internatio... 2313 Long - NA $25.3m
Company Ticker Held Current GSEF Category Value Riskiest Holdings
Nio Inc. NIO Long 4.11% Mid $65.4m This table shows the individual Gray Swan Event Factors for this ETF’s most at-risk equities as of Sep 24, 2021. Baozun Inc. BZUN Long 3.92% Mid $6.41m The average equity GSEF across 6,500 public equities is Jd.Com, Inc. JD Long 3.10% Mid $59.7m 1.25%. Equities with a GSEF between 5% and 10% are considered high risk. Equities with a GSEF above 10% are Tal Education Group TAL Long 2.65% Mid $10.8m extreme risks. Gray Swan Event Factors are derived from skilled analysts Huazhu Group Ltd. HTHT Long 2.62% Mid $14.7m charting 15 years of negative gray swan event disclosures Pinduoduo Inc. PDD Long 2.59% Mid $47.4m against stock price declines following such disclosures. A Gray Swan Event Factor is an assessment of the New Oriental Educat... EDU Long 2.48% Mid $14.9m likelihood of, and 12-month price risk for, gray swan Vipshop Holdings Ltd. VIPS Long 2.44% Mid $13.5m events for each equity.
Yum China Holdings,... YUMC Long 0.57% Low $30.2m
Meituan Dianping Cl... 3690 Long - NA $90.5m
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 This table lists the equity holdings for Global X MSCI China Consumer Disc ETF ranked by highest GSE Factor (riskiest rst). We list all equities (US and foreign) for this ETF. However, some foreign listings only show via a ticker.
To further evaluate risks, you can access details for each company by opening its Brief Watchdog Report available for viewing and pdf download. The report is free to readers for their personal consumption and it includes the executive summary data pulled from the full Watchdog Report.
To learn more about the full Watchdog and GSEF Reports go to last page or visit watchdogresearch.com.
Company Access Details Ticker Held Current GSEF Category Value
Nio Inc. Watchdogresearch.com/watchdog/$NIO NIO Long 4.11% Mid $65.4m
Baozun Inc. Watchdogresearch.com/watchdog/$BZUN BZUN Long 3.92% Mid $6.41m
Jd.Com, Inc. Watchdogresearch.com/watchdog/$JD JD Long 3.10% Mid $59.7m
Tal Education Group Watchdogresearch.com/watchdog/$TAL TAL Long 2.65% Mid $10.8m
Huazhu Group Ltd. Watchdogresearch.com/watchdog/$HTHT HTHT Long 2.62% Mid $14.7m
Pinduoduo Inc. Watchdogresearch.com/watchdog/$PDD PDD Long 2.59% Mid $47.4m
New Oriental Education & Technology Group Watchdogresearch.com/watchdog/$EDU EDU Long 2.48% Mid $14.9m Inc.
Vipshop Holdings Ltd. Watchdogresearch.com/watchdog/$VIPS VIPS Long 2.44% Mid $13.5m
Yum China Holdings, Inc. Watchdogresearch.com/watchdog/$YUMC YUMC Long 0.57% Low $30.2m
Meituan Dianping Class B Common Stock - 3690 Long - NA $90.5m Usd.00001
Alibaba Group Holding Ltd. - 9988 Long - NA $77m
Li Ning Co Ltd - 2331 Long - NA $32.6m
Anta Sports Products Ltd - 2020 Long - NA $30.4m
Byd Co Ltd H - 1211 Long - NA $29.6m
Shenzhou International Group - 2313 Long - NA $25.3m
Geely Automobile Holdings Lt - 175 Long - NA $24.7m
Trip.Com Group Ltd - TCOM Long - NA $21.3m
Great Wall Motor Company H - 2333 Long - NA $18m
Li Auto Inc. Watchdogresearch.com/watchdog/$LI LI Long - NA $17.5m
Xpeng Inc. Watchdogresearch.com/watchdog/$XPEV XPEV Long - NA $16.6m
Fuyao Glass Industry Group Co. Ltd. - 3606 Long - NA $12.8m
Byd Co. Ltd. Class A - 002594 Long - NA $12.6m
Zhongsheng Group Holdings - 881 Long - NA $12m
China International Travel A - 601888 Long - NA $11.5m
Haier Smart Home Co Ltd Common Stock - 6690HK Long - NA $10.3m Hkd
China Meidong Auto Holdings - 1268 Long - NA $9.49m
Haidilao International Holdi Common Stock - 6862 Long - NA $9.33m Usd.000005
Minth Group Ltd - 425 Long - NA $8.49m
Jd Health International Inc - 6618HK Long - NA $7.92m
Bosideng International Holdings Ltd - 3998 Long - NA $7.53m Common Stock
Guangzhou Automobile Group H - 2238 Long - NA $7.25m
Tongcheng Elong Holdings Ltd Common - 780 Long - NA $7.08m Stock Usd.0005
Yadea Group Holdings Ltd - 1585 Long - NA $6.96m
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 Company Access Details Ticker Held Current GSEF Category Value
Dongfeng Motor Grp Co Ltd H - 489 Long - NA $6.9m
Topsports International Hold Common Stock - 6110HK Long - NA $6.44m Hkd.000001
Jiumaojiu International Holdings L - 9922 Long - NA $6.4m
China Education Group Holdin Common - 839 Long - NA $5.78m Stock Hkd.00001
Saic Motor Corp Ltd A - 600104 Long - NA $5.19m
Brilliance China Automotive - 1114 Long - NA $5.16m
Midea Group Co Ltd A - 000333 Long - NA $5.16m
Haier Smart Home Co. Ltd. Class A - 600690 Long - NA $4.94m
Gome Retail Hlds - 493 Long - NA $4.72m
Dada Nexus Ltd. Watchdogresearch.com/watchdog/$DADA DADA Long - NA $4.38m
Hengten Networks Group Ltd Common Stock - 136 Long - NA $3.54m
Fuyao Glass Industry Group A - 600660 Long - NA $3.46m
Chongqing Changan Automob A - 000625 Long - NA $3.38m
China Yuhua Education Corp L Common - 6169 Long - NA $3.36m Stock Hkd.00001
Ecovacs Robotics Co Ltd A - 603486 Long - NA $3.31m
Tcl Corp A - 000100 Long - NA $3.27m
Great Wall Motor Co Ltd A - 601633 Long - NA $2.93m
Gsx Techedu Inc Adr - GOTU Long - NA $2.87m
China East Education Holding Common - 667HK Long - NA $2.72m Stock Hkd.0001
Huayu Automotive Systems A - 600741 Long - NA $2.37m
Oppein Home Group Inc A - 603833 Long - NA $2.17m
Shandong Linglong Tyre Co A - 601966 Long - NA $1.82m
Shenzhen Overseas Chinese A - 000069 Long - NA $1.78m
Shanghai Jinjiang Internat A - 600754 Long - NA $1.67m
Changzhou Xingyu Automoti - 601799 Long - NA $1.62m
Hangzhou Robam Appliances A - 2508 Long - NA $1.42m
Offcn Education Technology A - 2607 Long - NA $1.42m
Kuang Chi Technologies Co - 2625 Long - NA $1.37m
Suning.Com Co. Ltd. Class A - 002024 Long - NA $1.35m
Huizhou Desay Sv Automotiv A - 002920 Long - NA $1.31m
Songcheng Performance Development Co. - 300144 Long - NA $1.3m Ltd. Class A
Jason Furniture Hangzhou C A - 603816 Long - NA $1.27m
Ningbo Tuopu Group Co Ltd A - 601689 Long - NA $1.22m
Hang Zhou Great Star Indus A - 2444 Long - NA $1.17m
Wuchan Zhongda Group Co L A - 600704 Long - NA $1.07m
Navinfo Co Ltd A - 2405 Long - NA $1.06m
Shanghai Yuyuan Tourist A - 600655 Long - NA $1.05m
Ningbo Joyson Electronic - 600699 Long - NA $1.01m
Faw Car Company Limited A - 000800 Long - NA $940k
Zhejiang Supor Cookware Co A - 2032 Long - NA $906k
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 Company Access Details Ticker Held Current GSEF Category Value
Sailun Group Co. Ltd. - 601058 Long - NA $884k
Liaoning Cheng Da Co Ltd A - 600739 Long - NA $865k
Joyoung Co Ltd A - 2242 Long - NA $839k
Shenzhen Mtc Co Ltd A Common Stock - 002429 Long - NA $782k Cny1.0
Wangfujing Group Co Ltd A - 600859 Long - NA $751k
Zhejiang Semir Garment Co A - 002563 Long - NA $738k
Guangdong Xinbao Electrical Appliances - 2705 Long - NA $681k Holdings Co. Ltd. Class A
Xiamen Intretech Inc A - 2925 Long - NA $637k
Weifu High Technology Grp A - 581 Long - NA $532k
Suofeiya Home Collection C A - 2572 Long - NA $227k
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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