Key points
- China AI ETF (AICH) began trading Wednesday on Nasdaq
- Unnamed swap entries are 23% of the file's weights
- Net assets were $1,250,025 on day one
- Unitary fee of 0.86%, and the fund is non-diversified
An actively managed fund called the China AI ETF (AICH) began trading on Nasdaq on Wednesday. Its first holdings file, dated September 16, lists 19 named Chinese stocks, four swap positions, and cash. The named stocks include two companies we have written about as listing candidates, Z.AI at 5.55% and MiniMax at 3.68%, both of which sit on our AI IPO tracker.
Shares traded at $25.85 on Wednesday, on volume of about 14,600 through late morning.
What is in it
The largest named holding is Hygon Information Technology at 6.42%. Zhongji Innolight is 6.18%, Montage Technology 5.93%, and Eoptolink Technology 5.68%. Cambricon Technologies, the AI chip designer, is 5.13%.
The rest of the named book runs across the supply chain rather than the internet giants. Contemporary Amperex Technology is 4.21%, NAURA Technology 3.80%, and Shanghai Biren Technology 3.86%. Alibaba is 3.50%, Tencent 2.24%, and Baidu 1.95%. GigaDevice Semiconductor is the smallest line at 0.87%.
The file assigns 71.3% to named stocks, 5.58% to cash, and 23.0% to swaps. Its listed market values total $1,248,373.43, which is $1,651.57 below reported net assets. The file does not reconcile that difference.
The part the holdings file does not name
Four unnamed swap entries make up that 23.0%. Each appears as a code rather than a company, with no security name attached. The fund replaces that file as its holdings change, so the figures here come from the September 16 copy, which we have preserved. The file does not say whether those weights reflect the market value of the swaps or their notional exposure. The four range from 4.81% to 6.36%.
The summary prospectus says the fund may get its exposure "directly through investments in equity securities or indirectly through derivative instruments, including swap agreements and forward contracts." It also says that for the purposes of the rule requiring 80% of net assets to sit in China AI companies, "derivative instruments are valued at their notional value." Notional value is the face amount a derivative is written against, which is not the same as the money put up for it.
The prospectus does not say which holdings are held through swaps or why. It does set out the constraint that makes direct ownership harder. Trading through Stock Connect, the link between the mainland exchanges and Hong Kong, is subject to daily quotas that "may restrict or preclude the Fund's ability to invest in China A-shares through Stock Connect." The document does not establish whether those restrictions explain the fund's swap positions.
Fees, size and who runs it
The fund charges a single unitary fee of 0.86% a year, out of which the adviser pays the fund's operating expenses. The prospectus lists exceptions the adviser does not cover. Among them are brokerage commissions, taxes, and interest on borrowings. Acquired fund fees, litigation costs, and other non-routine or extraordinary expenses also sit outside the fee. Net assets were $1,250,025 on the first day, across 50,001 shares. That is seed money, not a track record.
Tidal Investments is the adviser and EMQQ Global is the sub-adviser. EMQQ's founder Kevin T. Carter is one of three portfolio managers, alongside Qiao Duan and Andy Hicks of Tidal. EMQQ previously launched the China AI Tigers LLM ETF in August.
Carter said in the launch release that "investors are increasingly looking for ways to diversify their AI exposure beyond the largest U.S. technology companies."
The prospectus classes the fund as non-diversified, meaning it can put more of its money into a small number of issuers than a diversified fund can. It also carries what the document calls New Fund Risk. The fund has no operating track record for investors to assess.
