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Under typical market conditions, the fund dedicates a minimum of 80% of its total assets (excluding any collateral from securities lending) to either the direct components of its benchmark index or to other investments that exhibit virtually identical economic attributes. This underlying index employs a modified float-adjusted market capitalization weighting, comprising common stocks from China, with the explicit exclusion of those belonging to "state-owned enterprises." The fund is categorized as a non-diversified investment.
Is CXSE's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
If advisors and investors haven't been keeping a close eye on the Chinese market recently, now may be a very good time to start doing so. On Wednesday, President Trump headed off to Beijing for a two-day summit, marking the first time a U.S. president has visited China in nearly a decade.
The WisdomTree China ex-State-Owned Enterprises Fund ETF is rated Hold, reflecting fair valuation and mixed technicals. CXSE has underperformed over the past year, with negative alpha and weak near-term seasonality, but shows signs of bullish consolidation. The CXSE ETF is highly concentrated in Chinese tech and AI, with Alibaba and Tencent comprising 17% of assets and limited exposure to value sectors.
China stocks were among the world's top performers last year. The MSCI China Index jumped 31%, slightly trailing the 34% returned by the MSCI Emerging Markets Index.
Investors willing to make a long-term bet on China in a less risky way could find the CXSE ETF a compelling option. By excluding state-owned enterprises, the ETF focuses on businesses where shareholder returns and strong fundamentals matter the most. Yet, anti-monopoly rules, regulatory fines, or a wealth rebalance are among practices that have been and can be imposed by the Chinese government on any domestic business.
It's been a good year for international equity ETFs. As a category, broad exposure funds tapping into both developed and emerging market equities have delivered outsized gains relative to U.S. markets this year, as well as much sought portfolio diversification.