Is The New Claymore-Alphashares China ETF Worth A Look? (YAO)

Today a new ETF today called the Claymore-Alphashares China All-Cap ETF (NYSE: YAO) began trading.

The new ETF is touted as being one of the most diversified China investments in existence. It is diversified throughout industries, market caps, and the number of holdings.

Most other China ETFs concentrate in a few top holdings, and are very heavy in industries such as financial services (some other China ETFs hold 55% in financial services). The All Cap ETF holds 99 different securities with the top holding representing about 7% of the overall portfolio.

This ETF will hold companies of all market capitalizations as well. As of September 30, 2009 the Index which this ETF will track had approximately 57% in large caps, 33% in mid caps and 10% in small caps.

The 0.7% expense fee is in line with other China/emerging market ETFs.

I think the ETF is a good choice for a China investor who wants more diversification within China, and much less of a financial services focus.

I will monitor it's performance over the next several months and see how it moves relative to other China ETFs.