FCA vs GXC

FCACFirst Trust China AlphaDEX Fund

GXCAState Street SPDR S&P 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.

GXC The whole China market in one ticker: roughly 1,400 stocks from megacaps down to small caps, tracked since 2007. Most China funds buy the famous names. GXC buys the phone book.

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.

GXC The fund seeks to provide returns that generally correspond to the total return performance of the S&P China BMI 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.

• GXC Holds roughly 1,400 names across large, mid and small caps, so the portfolio reaches well past the handful of megacap internet stocks that dominate narrower China funds.ssga.com
• Running since 2007, one of the longest-tenured US-listed China index funds, with a track record covering several full boom and bust cycles in the market.ssga.com
• Tracks the S&P China BMI Index tightly and sits in the upper tier of its single-country China peer group on our review.

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.

• GXC The 0.59% expense ratio sits at the pricier end of the shelf. Plain index rivals such as FLCH and CXSE charge less for China exposure.
• Volume is light next to the category's biggest China funds, so bid-ask spreads can widen. Limit orders are the usual defense.
• One country, one policy regime: Chinese regulation, politics and currency moves drive the whole ride, and payouts land only once or twice a year.

Full FCA profile⁠

Full GXC profile⁠