# ZCH: BMO MSCI China ESG Leaders Index ETF



## Freedom2022 (Oct 14, 2021)

Anybody own ZCH stock?


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## KaeJS (Sep 28, 2010)

I own XCH, which is basically the same thing.


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## Freedom2022 (Oct 14, 2021)

Thanks for responding. I have XCH on my watch list for a while. XCH is FXI in US. Looks like ZCH invest in China stocks directly with Canadian dollar.


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## KaeJS (Sep 28, 2010)

Freedom2022 said:


> Thanks for responding. I have XCH on my watch list for a while. XCH is FXI in US. Looks like ZCH invest in China stocks directly with Canadian dollar.


Yes, XCH is just FXI, you are correct. Mostly the same holdings as ZCH.

Unfortunately, I've been beaten down pretty bad lately on XCH. My ACB on XCH is about $22, I believe. Good thing it is not a large holding for me.

What is the reason for your thread? Are you considering adding more at this point?


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## Freedom2022 (Oct 14, 2021)

Yes. I want to buy ZCH or XCH for diversification.


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## KaeJS (Sep 28, 2010)

Freedom2022 said:


> Yes. I want to buy ZCH or XCH for diversification.


Well, XCH is the lowest it has ever been. In 12 years, it hasn't been this low.

It seems like there are generally two types of people, those that "wouldn't touch Chinese investments" and then those that would.

Seeing as they are probably the biggest long term threat to America... I think it's good to own some. Even if they are corrupt...

I have thought about adding more to my position, but haven't done so in about a year.


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## Freedom2022 (Oct 14, 2021)

XCH has dividend but ZCH does not.
XCH MER is 0.86% and ZCH is 0.67%.


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## KaeJS (Sep 28, 2010)

Yeah, the MERs are quite high, especially XCH


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## scorpion_ca (Nov 3, 2014)

Own 6,940 shares of ZCH in various accounts. XCH has less AUM (70 MM) than ZCH (100+ MM). I prefer greater AUM ETF.


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## scorpion_ca (Nov 3, 2014)

Freedom2022 said:


> XCH has dividend but ZCH does not.
> XCH MER is 0.86% and ZCH is 0.67%.


ZCH didn't pay dividend only last year as it converted from ADRs to direct listings in Hong Kong and also changed the stock selection criteria. Hopefully it will pay dividend this year.


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## AltaRed (Jun 8, 2009)

There is no rule of law in China, no transparency in accounting and the well being of every company is at the whim of Xi Jinping who now appears to be absolute dictator for life. He appears to be placing economic well being well behind increasing oppression of the people. Good luck with that.


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## Freedom2022 (Oct 14, 2021)

I read Ray Dalio's book. For diversification, investing in China is worthy. 
Good luck to all of us in any investment endeavor we pursue.


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## KaeJS (Sep 28, 2010)

China is absolutely f_cked.
But I still own some.
It's like a whole different world over there...


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## AltaRed (Jun 8, 2009)

Freedom2022 said:


> I read Ray Dalio's book. For diversification, investing in China is worthy.
> Good luck to all of us in any investment endeavor we pursue.


So have I. China may have its day but I'd die of starvation waiting. In all fairness, my remaining investing horizon is likely <15 years, so I don't have a long term view.


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## Jimmy (May 19, 2017)

I don't know about China anymore. Their companies have great growth prospects but the govt meddles at will. They used to have terms of 10 yrs so they wouldn't have Presidents for life but Xi just tore that rule up and announced he is staying on as leader. Market down about 4% w many stocks like Alibaba down 10%+ today.


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## KaeJS (Sep 28, 2010)

Debating on nibbling a bit here...


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## KaeJS (Sep 28, 2010)

Alright,

Added to my position of XCH @ $14.05


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## scorpion_ca (Nov 3, 2014)

Today is a good day to buy Chinese stocks/ETF.


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## james4beach (Nov 15, 2012)

Chinese and Emerging Markets stocks are getting brutalized.

Here's a chart of ZEM, for emerging markets (in red) compared to broad world equities XAW (black).

Emerging markets were performing more or less on par until 2021.


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## robfordlives (Sep 18, 2014)

I participated in China with a very small % of my holdings in Nio. I think at peak it was .4% of my holdings. This is down 80% or something and a reminder to me about not investing in individual stocks. I need to look closer at XAW and VXC as I want zero to do with China going forward. My vague recollection is one of those two has China as part of their Emerg Market side.

I'm realizing now that there is a reason Emerg Markets trade at such a lower multiple. They are not cheap. They are primarily corrupt, lawless, rule-less hellholes with zero governance.


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## AltaRed (Jun 8, 2009)

One quibble with your comments. No one really knows the real valuations since there are no rules.


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## james4beach (Nov 15, 2012)

robfordlives said:


> I'm realizing now that there is a reason Emerg Markets trade at such a lower multiple. They are not cheap. They are primarily corrupt, lawless, rule-less hellholes with zero governance.


That's true, but I also think there's a cultural difference. This is where I disagree with the idealists who say that you should diversify the whole world... I disagree.

Stocks are not universally loved and worshipped. They are an American + European thing, *culturally *(maybe Japan too). In these western countries, stocks have become a foundation of pension systems (401k/RRSP) and governments are supportive of public equities as well. Economists are unanimously pro equities.

I think this has become culturally rooted and it would take many decades for that to change. But not the case in China, where the stock market only became "a thing" with significant market cap starting about 15 or 20 years ago. So it's all a very new idea in China, and was largely treated as a casino over the years, which also isn't encouraging. Same with a place like India... sure it's been popular for a while, but it's a new concept.

And Brazil? Forgot about it. Just imagine the corruption in the whole system. I used to laugh at this BRIC concept, what a stupid idea. Everyone remember how much Wall Street was pumping BRIC a decade ago? I'm suspicious of anything that gets a cute name and pumped constantly in the media. Same logic tells me that ESG is stupid.

*(B)*razil ... hot bed of corruption, and a crashing domestic currency
*(R)*ussia ... now literally at war with the west, stocks wiped out
*(I)*ndia ... not sure about this one
*(C)*hina ... countless problems, corrupt Communist party, unfriendly to stocks too

Many Chinese investors were just gambling, and it burned many people over these years, so I can guarantee you that stocks are not a popular idea in China.


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## doctrine (Sep 30, 2011)

There is nothing good that can come of Chinese stocks. I used to own Emerging Markets ETFs (like VEE) for exposure, but they are/were effectively almost 25% Chinese. I have long since gotten rid of all of it, mostly invest in Can/US with some remaining EAFE. Xi is dictator and one person can arbitrarily determine the fate of every Chinese company. And the rest of the world has been made aware of the risks of these companies operating with Chinese control, so it's not like they have opportunities outside of China. A big sell for me.


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## AltaRed (Jun 8, 2009)

My only exposure to Emerging Markets is in VEQT holdings where EM is 7.46% weighted. Of that 7.46%, 2.4% is China, 1.4% is India and 1.2% is Taiwan. That is more than enough exposure to BRIC, or as most funds have since dumped Russia at near zero valuation, now BIC. Those who stick around to play in China either have oversized gonads or drink different water than the rest of us. A China move on Taiwan would most likely result in valuation collapses.

James, it was that nasty company Goldman Sachs responsible for a lot of ills* in global finance that coined the BRIC term in 2001. Goldman Sachs | Commemorates 150 Year History - With GS Research Report,

* GS was also the instigator of off-balance sheet finance for companies and even countries like Greece.


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## james4beach (Nov 15, 2012)

AltaRed said:


> James, it was that nasty company Goldman Sachs responsible for a lot of ills* in global finance that coined the BRIC term in 2001. Goldman Sachs | Commemorates 150 Year History - With GS Research Report,


Thanks, I didn't know they came up with the term.


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