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CHNA ETF Rebalance – February 2020

Feb. 12, 2020

February 10th marked the semi-annual rebalance and reconstitution of the China BioPharma ETF’s (Nasdaq: CHNA) underlying index. This happens in a few steps.


A committee of advisors that oversees the index gets together and determines the reconstitution, which means they decide if any new companies should be added. For the February meeting, the committee has added seven new companies:

  • Alphamab Oncology (HKEX: 9966)
  • Ascletis Pharma (HKEX: 1672)
  • China Grand Pharmaceutical and Healthcare (HKEX: 512)
  • CK Life Sciences (HKEX: 775)
  • CStone Pharmaceuticals (HKEX: 2616)
  • I-Mab Biopharma (Nasdaq: IMAB)
  • Pharmaron Beijing (HKEX: 3759)


Once the index’s holdings have been finalized, a rebalance occurs according to the index’s modified equal weighting methodology. Each constituent is weighted equally, subject to the following adjustments applied depending on a company’s market capitalization to emphasize the role of larger companies.



CHNA ETF then places trades to replicate those changes as closely as possible. Investors in the ETF do not need to take any action since these trades by the fund automatically update their exposure. View all holdings of the China BioPharma ETF.

As of the rebalance, the China BioPharma ETF will have 36 holdings going forward.


To help the fund’s investors and followers learn more about the companies that have been added, we have provided a brief background of their work and what sets them apart. The CHNA ETF is thrilled to welcome each of them to the fund.



Alphamab Oncology (HKEX: 9966)

Alphamab Oncology had its initial public offering (IPO) on the Hong Kong Stock Exchange in December of 2019. As its name implies, the company focuses on developing cancer medicines. Alphamab’s lead programs include a subcutaneous PD-L1 inhibitor, a bi-specific antibody targeting PD-L1 and CTLA-4, and a HER2 bi-specific antibody.



Ascletis Pharma (HKEX: 1672)

Having a history of developing anti-viral medicines for conditions like hepatitis C and the human immunodeficiency virus (HIV), Ascletis has been working lately to see if any of its medicines might contribute to a treatment for the coronavirus. In addition, it is developing a PD-1 inhibitor and is conducting research against non-alcoholic steatohepatitis (NASH).



China Grand Pharmaceutical and Healthcare (HKEX: 512)

China Grand is welcomed back to CHNA ETF after successfully qualifying for the fund’s minimum liquidity threshold. You might recall that last year we visited with the company’s CEO, Rocky Shao, in Hong Kong. As Dr. Shao described in the interview, China Grand has a large ophthalmology franchise in China, owns Sirtex Medical in the United States, and has been transitioning to a model of innovation over time.



CK Life Sciences (HKEX: 775)

CK Life Sciences is part of the conglomerate CK Hutchison, which was founded by retired billionaire Li Ka-shing. The company’s subsidiary Polynoma has a cancer immunotherapy vaccine, seviprotimut-L, currently in phase 3 development for melanoma patients who are at high risk of seeing their cancer recur. This vaccine uses antigens from three melanoma cell lines.



CStone Pharmaceuticals (HKEX: 2616)

CStone Pharmcaceuticals had its initial public offering (IPO) on the Hong Kong Stock Exchange in February of 2019. The company focuses on developing cancer medicines. It has a PD-L1 inhibitor in pivotal trials, and also is developing medicines against targets such as PD-1, CTLA-4 and MEK. It has partnerships with the U.S. companies Agios and Blueprint Medicines to develop some of their lead assets in China.



I-Mab Biopharma (Nasdaq: IMAB)

I-Mab Biopharma recently had its initial public offering (IPO) on Nasdaq in January of 2020. It is developing drugs both in China and globally. In China, some projects in development include a CD38 monoclonal antibody, a B7-H3 monoclonal antibody, a long acting human growth hormone, and a soluble gp130 IL-6 inhibitor. Globally, its pipeline includes a GM-CSF monoclonal antibody, a CD47 monoclonal antibody, and a CD73 monoclonal antibody.



Pharmaron Beijing (HKEX: 3759)

Pharmaron Beijing had an initial public offering (IPO) on the Hong Kong Stock Exchange in November of 2019. It already had previously traded on the Shenzhen Stock Exchange (one of the two main stock exchanges in mainland China). The company is a contract research organization (CRO) that helps other biopharma companies conduct scientific research. It has 7,000 employees across locations in China, the United Kingdom, and the United States.

Thank you for your interest in the China BioPharma ETF. Please be sure to sign up for email alerts below if you would like to receive notification of news, company interviews, and research that we publish from time to time.

Opinions expressed are those of the author or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Agios and Blueprint Medicines are not a holding of the fund or affiliated with the fund.

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CNCR Prospectus CHNA Prospectus

A basis point is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

The Loncar Cancer Immunotherapy Index is an index of 25 securities that have a strategic focus on the area of cancer immunotherapy, or harnessing the immune system to fight cancer. Quotes for the index can be found under the symbol “LCINDX” on the Bloomberg Professional service and other financial data providers. One may not directly invest in an index.

The Loncar China BioPharma Index is an index of 36 securities that have a strategic focus on advancing China’s biopharma industry. Quotes for the index can be found under the symbol “LCHINA” on the Bloomberg Professional service and other financial data providers. One may not directly invest in an index.

Holdings are subject to change.

The Hong Kong Stock Exchange (HKEX) is the primary stock exchange in the Hong Kong Special Administrative Region of China. Nasdaq is one of the primary stock exchanges in the United States.

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained at Read the prospectus carefully before investing.

Investing involves risk. Principal loss is possible. The fund may trade at a premium or discount to NAV. CNCR will invest in immunotherapy companies which are highly dependent on the development, procurement and marketing of drugs and the protection and exploitation of intellectual property rights. A company’s valuation can also be greatly affected if one of its products is proven or alleged to be unsafe, ineffective or unprofitable. The costs associated with developing new drugs can be significant, and the results are unpredictable. The process for obtaining regulatory approval by the U.S. Food and Drug Administration or other governmental regulatory authorities is long and costly and there can be no assurance that the necessary approvals with be obtained and maintained. The Fund may invest in foreign securities, which involve political, economic, currency risk, greater volatility, and differences in accounting methods. The Fund is non-diversified meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. The Fund invests in smaller companies, which may have more limited liquidity and greater volatility compared to larger companies. The Fund is not actively managed and may be affected by a general decline in market segments related to the index. The fund invests in securities included in, or representative of securities included in, the index, regardless of their investment merits. The performance of the fund may diverge from that of the Index and may experience tracking error to a greater extent than a fund that seeks to replicate an index. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

RISK FOR THE CHNA ETF: The biopharmaceutical industry in China is strictly regulated and changes in such regulations, including banning or limiting certain products, may have a material adverse effect on the operations, revenues, and profitability of Biopharma Companies. The laws and regulations applicable to the process of administrative approval of medicine and its production in China require entities producing biopharma products to comply strictly with certain standards and specifications promulgated by the government. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the investment. Currency exchange rates can be very volatile and can change quickly and unpredictably. Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. For example, investments in non-U.S. securities may be subject to risk of loss due to foreign currency fluctuations or to political or economic instability. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. These and other factors can make investments in the Fund more volatile and potentially less liquid than other types of investments. To the extent the Fund invests a significant portion of its assets in the securities of companies of a single country or region, such as China, it is more likely to be impacted by events or conditions affecting that country or region. The Fund is a recently organized, non-diversified management investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. The Fund is not actively managed and the Fund's sub-adviser would not sell shares of an equity security due to current or projected underperformance of a security, industry or sector, unless that security is removed from the Index or the selling of shares of that security is otherwise required upon a reconstitution of the Index in accordance with the Index methodology. To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors."

Diversification may not protect against market risk.

Exchange Traded Concepts, LLC serves as the investment advisor, and Vident Investment Advisory, LLC serves as a sub advisor to the fund. The Funds are distributed by Quasar Distributors, LLC, which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.