There has been a lot of talk lately about Chinese ETF's and their growing popularity. The choices for investing have spread out and there are more opportunities than ever to use an ETF to invest in China in one way or another. Today we will take a look at a few of the popular ones and highlight their focuses.
The largest ETF and most popular is the iShares China Large-Cap (FXI ). The average trading volume on this ETF is almost 10 times of its closest competitor. The goal of the ETF is to track eh FTSE China 25 Index. Their holdings include 50 of the largest companies that trade on the Hong Kong exchange though it should be noted that 32% of their holdings are in 4 companies and those companies are more focused in the financial and energy space.
The iShares MSCI China ETF (MCHI ) is another ETF with good volume which lets you focus more broadly on large and mid-sized companies in China. For the active investor this is a great vehicle to choose due to its average trading volume but if you are considering a long term hold on the MCHI you should note that almost 30% of this ETF is invested in just two companies. Tencent Holdings, and Alibaba (BABA ).
Focusing on another area of China you have the X-trackers Harvest CSI 300 China A-Shares ETF (ASHR ). This ETF's goal is to generate results that correspond to the performance of the CSI 300 Index. If you are not familiar with the CSI 300 it is an index comprised of the 300 largest and most liquid stocks on the China A-Share market. Now, the volume is not as high as the previous two ETF's we mentioned but ASHR is always an ETF that gets mentioned when speaking of Chinese ETF's so its certainly one to have on your list. Day traders, this one is most likely not one for you.