TCEHY - Assessing Variable Interest Entity Risk In Your China Portfolio

• VIE risk is prevalent and concentrated in offshore Chinese Internet companies, but it probably won’t rank among the top three risk factors for the current situation.
• WisdomTree’s China ex-State-Owned Enterprises Index has about 30% China A and H shares, plus sectors much broader than China tech; thus, its VIE exposure is high but less than many other China funds.
• The imperfect analogy is that VIE default risk is a bit like China’s sovereign default risk. It’s always there, and it’s higher for an emerging market country like China.

For further details see: