BROKERS’ NOTES: Buy this CoreShares ETF, sell this Satrix one

Nerina Visser, independent exchange traded funds strategist and adviser, and former president of the CFA Society SA:

BUY: CoreShares Total World Stock ETF

When I look at the ETF universe, I look at an investment rather than a trading instrument. I’m looking for something with an investment view of at least five years that I will be comfortable to buy and put in my bottom drawer.

From that perspective, my preferred one is the CoreShares Total World Stock ETF because when considering my investment horizon, I want to be in equities. I would like to have as broad an exposure as possible.  This ETF, investing in the Vanguard Total World Stock ETF, gives an investor exposure to more than 9,000 large-, mid- and small-cap stocks across developed and emerging markets. In addition, it has one of the lowest total expense ratios among its offshore peers, at 0.29%. Thus, it gives an investor both broad and cost-efficient exposure to offshore equities.

SELL: Satrix MSCI China ETF

This is not because I think long-term investment in China is not important. It absolutely is. But the Chinese investment market is multifaceted and multidimensional.

The Satrix MSCI China ETF specifically invests in Chinese stocks that are listed on the Hong Kong Stock Exchange, which really presents the global investor’s view of China. The aspect of China in which I am much more interested in the longer term is the domestic market. 

These are the so-called A shares that are listed on the Shanghai and Shenzen stock exchanges. These represent many different companies that are focused on the domestic consumer.  That is where the real attraction in China lies for long-term investment. As global investors get increased access to the these A-share companies, I would rather sell the Satrix MSCI China ETF and opt for exposure to the domestic Chinese market.