What's The Difference Between Different China ETFs?


#1

I am interested in allocating a portion of my portfolio towards China - does anyone have any ideas?


#2

Okay, I will go through the Chinese market now…

1. The Different Types Of Shares

A-Shares: Are companies incorporated in China and listed on the China’s different equity markets: Shanghai Stock Exchange And Shenzhen Stock Exchange.

A-Shares are traded and denominated in Remnibi and are only allowed to be traded by residents of China…

B-Shares: are companies that are traded on the Shanghai Stock Exchange, or Shenzen Stock Exchange. They are denominated in Remnibi and traded in US dollars as well. They can be traded by investors around the world.

H-Shares: is a security of companies incorporated in PRC and trading on the Hong Kong Stock Exchange. They are denominated in Remnibi and traded in Hong-Kong Dollars as well. They are no restrictions to who trades these.

Currently there is no product that gives investors full access to China’s A-Shares market. The MSCI (Morgan Stanley Strategy Indexes) only gives a certain amount of access to China’s shares in its emerging markets index. A-Shares are excluded completely:

iShares MSCI China ETF

The most well-known ETF. iShares China has approximately $3 billion under management and has returned 54% return since its inception in 2011.

Expense Ratio: .59%

TENCENT HOLDINGS LTD - 19.02%

ALIBABA GROUP HOLDINGS - 12.60%

CHINA CONSTRUCTION BANK CORP H - 5.32%

BAIDU ADR REPTG INC CLASS A - 3.97%

INDUSTRIAL AND COMMERCIAL BANK OF CHINA - 3.85%

CHINA MOBILE LTD Telecommunication Services China - 3.39%

PING AN INSURANCE (GROUP) CO OF CH - 3.38%

BANK OF CHINA LTD - 2.61%

JD.COM ADR REPRESENTING INC CLASS - 1.80%

CNOOC LTD Energy - 1.52%