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05-04-2017, 07:59 PM
This is a synthetic ETF by UOB Asset Management, which trades under the ticker JK8.SI.
It tracks the SSE 50 Index, which comprises the top 50 companies by market capitalization that are listed on the Shanghai Stock Exchange.
The ETF's inception date was in November 2009. For the first 5 or so years it did pretty well, tracking its benchmark index very closely.
However, the performance over the past 2 years has been absolutely terrible.
Take a look at the latest fund factsheet:
![[Image: FjQaXD2.png]](https://i.imgur.com/FjQaXD2.png)
Notice how the dark gray line started to diverge from the lighter gray line around 2015 and the gap has continued widening ever since?
Now look at the table on the right: over the past 3 years, the average annual compounded return for the benchmark index is 16.92%, versus 14.13% for the ETF. That's a difference of nearly 2.8% every year!
The severe underperformance is due to an enormous increase in the expense ratio. In the earliest unit holder report I could find (June 2011), the expense ratio was a reasonable 0.97%. By Dec 2016 (the most recent unit holder report), this had ballooned to 3.99%.
Posting this here as a warning to potential investors looking to get exposure to the China market - look elsewhere.
And for those of you like me who bought this ETF back when it was tracking the index properly, please, please, please call / email UOB and let them know that this level of underperformance for an index tracking fund, is UNACCEPTABLE.
It tracks the SSE 50 Index, which comprises the top 50 companies by market capitalization that are listed on the Shanghai Stock Exchange.
The ETF's inception date was in November 2009. For the first 5 or so years it did pretty well, tracking its benchmark index very closely.
However, the performance over the past 2 years has been absolutely terrible.
Take a look at the latest fund factsheet:
Notice how the dark gray line started to diverge from the lighter gray line around 2015 and the gap has continued widening ever since?
Now look at the table on the right: over the past 3 years, the average annual compounded return for the benchmark index is 16.92%, versus 14.13% for the ETF. That's a difference of nearly 2.8% every year!
The severe underperformance is due to an enormous increase in the expense ratio. In the earliest unit holder report I could find (June 2011), the expense ratio was a reasonable 0.97%. By Dec 2016 (the most recent unit holder report), this had ballooned to 3.99%.
Posting this here as a warning to potential investors looking to get exposure to the China market - look elsewhere.
And for those of you like me who bought this ETF back when it was tracking the index properly, please, please, please call / email UOB and let them know that this level of underperformance for an index tracking fund, is UNACCEPTABLE.