FCA vs FLCH

FCACFirst Trust China AlphaDEX Fund

FLCHAFranklin FTSE China ETF

In short

FCA Most China ETFs just hold the market. FCA screens the Nasdaq China universe on growth and value factors, keeping roughly 50 names weighted by rank rather than size. A quant twist on China exposure, running since 2011.

FLCH Cheap and wide, in the best way. FLCH holds roughly a thousand Chinese stocks and charges 0.19% a year, a fraction of what most single-country China funds ask. Whole market, small toll.

Stated mandate

FCA The fund seeks to generally match, before fees and expenses, the price and yield performance of the Nasdaq AlphaDEX China Index. It normally invests at least 90% of net assets in securities comprising that index and uses an indexing approach.

FLCH The Fund seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE China RIC Capped Index.

Why people hold it

• FCA Not a cap-weighted mirror. The AlphaDEX screen ranks the Nasdaq China universe on growth and value factors, then selects and weights the survivors by rank, so the biggest listing isn't automatically the biggest position.firsttrust.ca
• Concentrated on purpose: roughly 50 stocks instead of the hundreds in a broad China index. Every holding has to earn its slot through the screen.
• Launched in 2011, which makes it one of the longer-tenured China funds on the shelf. The rules have been through multiple China booms and busts, not just a back-test.
• Rules, not hunches. It normally keeps at least 90% of net assets in its Nasdaq index constituents and uses a straight indexing approach, so nobody is trading headlines for you.

• FLCH 0.19% a year, against a roughly 0.70% median for China funds. It also undercuts the category stalwarts MCHI and GXC, both at 0.59%.
• About 1,000 holdings, so you own the long tail of Chinese listings rather than a short list of mega-cap headline names.
• One job, done tightly: mirror the FTSE China RIC Capped Index before fees. On tracking it ranks among the strongest builds in its China peer group.sec.gov

Worth knowing

• FCA The screen costs money: 0.80% a year, versus a fraction of that at plain cap-weighted China trackers such as FLCH (0.19%) and CXSE (0.32%).
• Small asset base and thin trading volume. Bid-ask spreads and order size matter more here than at the category giants, and premiums or discounts can widen.
• Factor weighting means returns can drift well away from the headline China indexes in either direction. That divergence is the point, and it cuts both ways.

• FLCH It is China or nothing. Policy shifts, regulatory news and the currency drive the ride, with no other market in the basket to cushion it.
• Mid-sized and only moderately traded next to the category's giants, so bid-ask spreads can bite more on larger orders.
• Cash comes once or twice a year, not monthly. This is an equity index vehicle, not an income schedule.

Full FCA profile⁠

Full FLCH profile⁠