Important Information
Investors should not base investment decisions on this website alone. Please refer to the Prospectus for details including product features and the risk factors. Investment involves risks. Past performance is not indicative of future performance. There is no guarantee of the repayment of the principal. Investors should note:
- Global X FTSE Greater China ETF (the “Fund”)’s investment objective is to provide investment results that, before fees and expenses, closely correspond to the performance of the FTSE MPF Greater China Index (the “Index”).
- The Fund is subject to concentration risk as a result of tracking the performance of a single geographical region or country (Greater China). The Fund may likely be more volatile than a broad-based fund, such as a global equity fund, as it is more susceptible to fluctuations in value of the Index resulting from adverse conditions in the region.
- The Fund invests in certain emerging markets such as Mainland China and Taiwan. This may involve increased risks and special considerations not typically associated with investment in more developed markets, such as liquidity risks, currency risks/control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risk and the likelihood of a high degree of volatility.
- Listed companies on the ChiNext market and/or STAR Board are usually of emerging nature with smaller operating scale. In particular, listed companies on ChiNext market and/or STAR Board are subject to higher fluctuation in stock prices and liquidity risks, Over-valuation risk, Differences in regulation, Delisting risk, and Concentration risk.
- The Fund may invest in mid-capitalisation companies, which may have lower liquidity and their prices are more volatile to adverse economic developments than those of larger capitalisation companies in general.
- The borrower may fail to return the securities in a timely manner or at all. The Fund may as a result suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from redemption requests. As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund.
- There are risks and uncertainties associated with the current Mainland China tax laws, regulations and practice in respect of capital gains realized via Stock Connect on the Fund’s investments in Mainland China (which may have retrospective effect). Any increased tax liabilities on the Fund may adversely affect the Fund’s value.
- The trading price of the Shares on the SEHK is driven by market factors such as the demand and supply of the Shares. Therefore, the Shares may trade at a substantial premium or discount to the Fund’s Net Asset Value.
- Payments of distributions out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any such distributions may result in an immediate reduction in the Net Asset Value per Share of the Fund and will reduce the capital available for future investment.
Market Commentary
Global X FTSE Greater China ETF (3470)
HK/China Market
Hong Kong and China equity markets demonstrated strong resilient this month amid increasing geopolitical tensions, and risk appetite improved following the ceasefire between Iran and Israel. Domestically, the intensified competition in food delivery/instant shopping sector between eCommerce players (Alibaba, JD) and local service leaders (Meituan) led to the share price decrease of these companies.
Market sentiment improved as policymakers clarified their stance. Chinese policymakers amplified their message targeting “anti-involution”, aiming to curb excessive competition and foster sustainable, high-quality growth. It specifically highlighted the intense competition in solar, lithium batteries, new energy vehicles, and e-commerce platforms. While further policy details are needed, we view this increased focus as a promising initial step in addressing China’s overcapacity challenges.
Positive signals also emerged from a more pro-growth capital market policy stance. The CSRC Chairman discussed key initiatives including 1) leveraging capital markets for fund-raising to support tech firms; 2) reintroducing listing rules for unprofitable firms; 3) Payment Connect and a series of opening measures to boost fund flows to Hong Kong; 4) encouraging more IPO and PE/VC investments in consumer companies.
Despite the short-term headwinds, we remain positive on the rise of China’s high-end technology and expect these companies to deliver attractive stock returns in the mid-long term. The emergence of Deepseek is a good example of Chinese companies’ innovative capabilities, but it is just tip of the iceberg. In 2024, China’s total R&D expenditure surged to Rmb3.6 trillion, securing the second position globally and marking an impressive 8.3% YoY growth (National Bureau of Statistics of China, Jan 2025). China surpasses the US in the Nature Index 2024, indicating strong competitiveness in science and technology field. As a result of continued investments, in various of high-tech sectors such as AI, EV, battery, and Robotics, we are seeing a number of leading Chinese companies not only capturing domestic market share, but also expanding into overseas markets with globally competitive products. With central governments’ efforts to prioritize technology innovation and position high-tech manufacturing as a key growth engine, we believe high-tech companies will play a crucial role to support China’s transition to technology innovation driven economy.
For China consumer, retail sales increased by 6.4% YoY in May, beat market expectation and accelerating from 5.1/5.9% YoY in April/March (National Bureau of Statistics of China, June 2025). Recent NDRC meeting announced a third round of trade-in subsidy will be released in July. Policymakers emphasized their commitment to maintaining consistent and effective incentives, albeit with a more targeted approach. For “New Consumption” names, we have seen some corrections during the month, while from fundamental perspective, growth figure remained strong with street expectations for Pop Mart remain bullish that the company will meet its full-year earnings guidance of Rmb10bn (Goldman Sachs, Jul 2025), and channel checks suggest potential earnings beat in 2Q(Mirae Asset, Jul 2025) .
Improving shareholder returns: Beyond the growth-theme, we also see improving shareholder returns from Chinese companies. Driven by a strong policy push following April 2024’s “Nine Measures,” authorities have implemented concrete policies to prompt listed firms to return more cash to shareholders. Buoyed by this regulatory focus, robust operating cash flows, substantial cash reserves, and a historically conservative approach to distributions, Chinese listed companies delivered record shareholder returns in 2024. Over 4,300 companies across A-shares, H-shares, and ADR programs (including financials) distributed a combined Rmb2.7tn in dividends, up 7% YoY (Mirae Asset, July 2025). Notably, more than 200 companies initiated dividends for the first time since 2020. The aggregate dividend payout ratio rose to 39% (excluding loss-making firms), up from 37% in 2023 and well above the 10-year average of 31% (Mirae Asset, 2025). We anticipate both total dividends and the payout ratio will continue rising this year.
Taiwan Market
Overall sentiment improvement on semiconductor cycle, especially post Computex in mid-May. This positive trend has been further supported by reduced concerns over potential AI order reductions in the near term, due to the increasing assembly yield for AI server racks from downstream ODMs.
Increasing AI adoption in the data centre and increasing penetration of AI at the edge and on-device will be the key enabler of next upcycle semiconductor as AI-enabled devices have much higher semi-content. We expect volume growth in end devices to drive broad-based semiconductor cycle recovery in 2025. Companies with strong order visibility or leading market positions, such as TSMC, Alchip, Delta, King Slide, Accton, and Wiwynn, are seen as key beneficiaries.
TSMC: we expect TSMC to maintain strong revenue growth momentum, fueled by multiple catalysts: 1) increasing blended ASP: driven by ongoing migration to more advanced nodes – more AI customers shifting from N4 to N3, and major non-AI customers (primarily smartphone and PC) adopting N2; 2) further price hikes for advanced nodes and CoWoS packaging.
As part of its accelerated U.S. expansion, TSMC’s second Arizona facility (P2) will commence equipment installation as early as Q3 2026, aiming for mass production in 2027. The company is aggressively compressing construction timelines into just two years, with its supply chain working to meet customer demand and address U.S. tariffs more rapidly. Chairman and CEO CC Wei stated that the AI business remains “very strong,” and predicted that the company’s revenue and profit for this year will reach new record highs (Ainvest, July 2025).
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