How to invest in China using ETFs

How do I invest in Chinese stocks?

The easiest way to invest in the whole Chinese stock market is to invest in a broad market index. This can be done at low cost by using ETFs.

On the Chinese stock market you find 10 indices, which are tracked by ETFs. The speciality of China are the three categories of Chinese stocks: A-stocks, B-stocks and H-stocks.

Besides Hong Kong listed stocks, indices on the BRIC countries or Asia can be invested alternatively. In BRIC indices China is strongly weighted with up to 72%. The Asian indices weight China with 43% or less.

0.40% p.a. - 0.88% p.a.
annual total expense ratio (TER) of China ETFs
on the Chinese stock market, which are tracked by ETFs
on the Chinese stock market
The best indices for China ETFs

Performance of Chinese stocks (Hang Seng China Enterprises (HSCEI))

1 month: -5.76%
1 year: -7.68%
3 years: 0.97%
5 years: 25.77%

Indices in comparison

The best indices for ETFs on China

For an investment in the Chinese stock market, 10 indices tracked by 17 ETFs are available. The speciality of investing in China are the different categories of Chinese stocks. The total expense ratio (TER) of ETFs on these indices is between 0.40% p.a. and 0.88% p.a..

Index Investment focus Number of ETFs Number of constituents Short description

CSI 300

China 2 ETFs 300
The CSI 300 index consists of the 300 stocks with the largest market capitalisation and liquidity from the entire universe of listed A share companies in the People’s Republic of China.
Index factsheet

Dow Jones China Offshore 50

China 1 ETF 50
The Dow Jones China Offshore 50 (total return) index tracks 50 of the largest companies whose primary operations are in mainland China but that trade on exchanges in Hong Kong or the U.S.
Index factsheet

FTSE China 50

China 2 ETFs 50
The FTSE China 50 index tracks the 50 largest and most liquid Chinese companies listed on the Hong Kong Stock Exchange (H-Shares, Red Chips und P Chips).
Index factsheet

FTSE China A-H 50

China 1 ETF 50
The FTSE China A50 USD (price) index tracks the 50 largest Chinese A-Shares listed on the Shanghai or Shenzen stock exchanges. Each company will be represented either by its A-share or by its H-share.
Index factsheet

FTSE China A50

China 2 ETFs 50
The FTSE China A50 index tracks the 50 largest Chinese A-Shares listed on the Shanghai or Shenzen stock exchanges.
Index factsheet

Hang Seng China Enterprises (HSCEI)

China 2 ETFs 40
The Hang Seng China Enterprise (net) index (HSCEI) tracks the most important Chinese H-Shares, listed on the Hong Kong stock exchange.
Index factsheet

MSCI China

China 4 ETFs 447
(31/08/18)
The MSCI China (total return) index tracks the largest and most liquid Chinese stocks, listed on the Hong Kong stock exchange (H-Shares, B-Shares, Red Chips, P Chips).
Index factsheet

MSCI China A

China 1 ETF 659
(31/08/18)
The MSCI China A index tracks the largest and most liquid Chinese A-Shares, denominated in Renminbi ("RMB") and listed on the Shenzhen and/or Shanghai stock exchanges. This index reflects Mainland China A-share securities from a domestic investor’s perspective.
Index factsheet

MSCI China A International

China 1 ETF 417
(31/08/18)
The MSCI China A International index tracks the largest and most liquid Chinese A-Shares, denominated in Renminbi ("RMB") and listed on the Shenzhen and/or Shanghai stock exchanges. This index reflects Mainland China A-share securities from an international QFII/RQFII investor’s perspective
Index factsheet

MSCI China H

China 1 ETF 93
(31/08/18)
The MSCI China H (total return) index tracks the largest and most liquid Chinese H-Shares, listed on the Hong Kong stock exchange.
Index factsheet
ETF
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
Xtrackers MSCI China Index UCITS ETF 1CLU0514695690 520 0.65% p.a. Accumulating Luxembourg Full replication
iShares China Large Cap UCITS ETFIE00B02KXK85 518 0.74% p.a. Distributing Ireland Full replication
Lyxor China Enterprise (HSCEI) UCITS ETF C-EURFR0010204081 477 0.65% p.a. Accumulating France Unfunded swap
Xtrackers CSI 300 Swap UCITS ETF 1CLU0779800910 271 0.50% p.a. Accumulating Luxembourg Unfunded swap
Xtrackers Harvest CSI 300 INDEX UCITS ETF 1DLU0875160326 267 0.65% p.a. Distributing Luxembourg Full replication
HSBC MSCI China UCITS ETF USDIE00B44T3H88 261 0.60% p.a. Distributing Ireland Full replication
HSBC MSCI China UCITS ETF USDDE000A1JF7L0 261 0.60% p.a. Distributing Ireland Full replication
Amundi MSCI China UCITS ETF - EUR (C)LU1681043912 141 0.55% p.a. Accumulating Luxembourg Unfunded swap
Xtrackers FTSE China 50 UCITS ETF 1CLU0292109856 128 0.60% p.a. Accumulating Luxembourg Full replication
iShares MSCI China A UCITS ETFIE00BQT3WG13 125 0.65% p.a. Accumulating Ireland Optimized sampling
iShares Dow Jones China Offshore 50 UCITS ETF (DE)DE000A0F5UE8 50 0.61% p.a. Distributing Germany Full replication
Deka MSCI China UCITS ETFDE000ETFL326 43 0.65% p.a. Distributing Germany Full replication
CSOP Source FTSE China A50 UCITS ETFDE000A1XES83 20 0.65% p.a. Accumulating Ireland Full replication
ComStage FTSE China A50 UCITS ETFLU0947415054 19 0.40% p.a. Distributing Luxembourg Unfunded swap
L&G E Fund MSCI China A UCITS ETFDE000A1XEFE1 16 0.88% p.a. Accumulating Ireland Optimized sampling
ComStage HSCEI UCITS ETFLU0488316992 10 0.55% p.a. Distributing Luxembourg Unfunded swap
Xtrackers Harvest FTSE China A-H 50 INDEX UCITS ETF 1DLU1310477036 6 0.65% p.a. Distributing Luxembourg Full replication
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI China A 2.10% -5.25% -14.79% -15.69% -14.13%
MSCI China A International 3.93% -3.65% -10.96% -10.45% -2.76%
CSI 300 3.30% -3.31% -10.96% -6.80% 1.86%
FTSE China A50 5.44% 0.00% -9.02% -1.69% 20.01%
MSCI China -1.39% -6.97% -5.20% -0.80% 39.76%
Dow Jones China Offshore 50 -0.73% -5.57% -3.78% -0.14% 48.89%
FTSE China 50 1.12% 0.04% -0.42% 3.61% 28.84%
FTSE China A-H 50 3.64% -0.09% -5.40% 3.86% -
MSCI China H 1.40% 2.05% -1.50% 4.04% 20.88%
Hang Seng China Enterprises (HSCEI) 1.40% 2.17% 0.54% 5.05% 19.57%
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
MSCI China A -17.49% 8.57% -16.86% 17.36% -
MSCI China A International -13.62% 12.23% -15.06% - -
CSI 300 -12.65% 16.61% -15.00% 12.06% 64.96%
FTSE China A50 -10.70% 25.05% -8.32% 1.79% -
MSCI China -6.80% 35.39% 3.59% 2.33% 21.55%
FTSE China A-H 50 -6.41% 23.16% - - -
Dow Jones China Offshore 50 -4.48% 28.13% 7.32% 2.45% 24.34%
FTSE China 50 -2.35% 18.24% 5.14% -2.03% 27.20%
MSCI China H -1.89% 12.92% 4.34% -7.04% 29.17%
Hang Seng China Enterprises (HSCEI) -0.16% 10.97% 2.59% -8.82% 29.46%

Source: justETF.com; As of 30/09/18; Calculations in EUR based on the largest ETF of the respective index.

 

The cheapest China ETFs
by total expense ratio (TER)

Show all

Speciality

Chinese A-stocks (A-Shares): Stocks of Chinese companies that are listed on the Shanghai or Shenzhen stock exchange and traded in local currency.

This category has been exclusive to Chinese investors. However, professional foreign investors with a special license are able to invest in these stocks under certain restrictions.

Chinese B-stocks (B-Shares): Stocks of Chinese companies that are listed on the Shanghai or Shenzhen stock exchange and traded in foreign currency.

This category has been open for foreign investments. Since the restrictions on A-Shares have been lowered, these shares tend to be losing liquidity.

Hong Kong H-stocks (H-Shares): Stocks of Chinese companies that are listed on the Hong Kong stock exchange and traded in Hong Kong Dollar (HKD).

This category has been open for foreign investments as well. Most institutional investors prefer H-stocks due to their relatively high liquidity.

 
Alternative investment opportunities

Indices on Hong Kong listed stocks

Besides China ETFs you can invest in ETFs on the Hong Kong stock market. In order to invest in Hong Kong there is 1 index, which is tracked by 2 ETFs. The total expense ratio (TER) of ETFs on Hong Kong is between 0.55% p.a. and 0.65% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
Hang Seng (HSI) Hong Kong 2 ETFs 50
(31/07/18)
The Hang Seng (net) index (HSI) tracks the largest and most liquid blue chip stocks listed on the Hongkong stock exchange.
Index factsheet
ETF
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
Lyxor Hong Kong (HSI) UCITS ETF D-EURFR0010361675 165 0.65% p.a. Distributing France Unfunded swap
ComStage HSI UCITS ETFLU0488316729 13 0.55% p.a. Distributing Luxembourg Unfunded swap
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
Hang Seng (HSI) -0.38% -2.11% 0.20% 4.70% 36.39%
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
Hang Seng (HSI) -1.94% 21.53% 5.99% 5.93% 18.74%

Source: justETF.com; As of 30/09/18; Calculations in EUR based on the largest ETF of the respective index.

 

Regional indices on Brazil, Russia, India and China (BRIC)

As second alternative you can consider ETFs on the BRIC countries. In total, you can invest in 2 BRIC indices tracked by 2 ETFs. In BRIC indices China is weighted with up to 72%. The S&P BRIC 40 contains the largest weight of Chinese stocks with 70,70%. The MSCI BRIC contains 61,07% China, the FTSE BRIC 50 66,70% and the DAXglobal® BRIC 33,33% (as of 29/12/2017). The total expense ratio (TER) of ETFs on BRIC countries is between 0.65% p.a. and 0.74% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
DAXglobal® BRIC Emerging Markets
China: 33,33%
(29/12/2017)
1 ETF 40
The DAXglobal BRIC index tracks the 40 largest and most traded stocks from Brazil, Russia, India and China. The Index contains 10 stocks from each of these countries.
FTSE BRIC 50 Emerging Markets
China: 66,70%
(29/12/2017)
1 ETF 50
The FTSE BRIC 50 index tracks the 50 largest stocks of the BRIC countries (Brazil, Russia, India, China).
Index factsheet
ETF
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
iShares BRIC 50 UCITS ETFIE00B1W57M07 220 0.74% p.a. Distributing Ireland Full replication
Market Access DAXglobal BRIC UCITS ETFLU0269999792 15 0.65% p.a. Accumulating Luxembourg Unfunded swap
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
FTSE BRIC 50 2.70% 0.81% -2.17% 7.22% 48.51%
DAXglobal® BRIC 3.86% 6.53% 2.07% 7.64% 36.62%
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
FTSE BRIC 50 0.45% 19.63% 19.70% -1.95% 8.97%
DAXglobal® BRIC 3.54% 5.31% 25.67% -4.13% 3.23%

Source: justETF.com; As of 30/09/18; Calculations in EUR based on the largest ETF of the respective index.

 

Asian indices with over 20% China share

As further alternative you can invest in indices on Asia. In total, you can consider 4 Asian indices, which are tracked by 11 ETFs. The Asian indices contain with 31% to 43% less Chinese stocks than the BRIC indices. The total expense ratio (TER) of ETFs on Asian indices is between 0.12% p.a. and 0.74% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
MSCI AC Asia ex Japan Asia Pacific
China: 34.19%
(29/12/2017)
3 ETFs 939
(31/08/18)
The MSCI AC (All Cap) Asia ex Japan index tracks equity markets of the emerging and developed countries of the Asia region, excluding Japan.
Index factsheet
MSCI AC Far East ex Japan Asia Pacific
China: 38.07%
(29/12/2017)
2 ETFs 855
(31/08/18)
The MSCI AC (All Cap) Far East ex Japan index tracks equity markets of the emerging and developed countries of the East Asian region, excluding Japan.
Index factsheet
MSCI Emerging Markets Asia Asia Pacific
China: 40.54%
(29/12/2017)
5 ETFs 867
(31/08/18)
The MSCI Emerging Markets Asia index tracks large and mid cap companies from Asian emerging markets.
Index factsheet
MSCI Emerging Markets Far East Asia Pacific
China: 46.11%
(29/12/2017)
1 ETF 783
(31/08/18)
The MSCI Emerging Markets Far East index tracks the largest companies in China (as accessible through the Hong Kong market), Indonesia, Korea, Malaysia, Philippines, Taiwan and Thailand.
Index factsheet
ETF
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI AC Far East ex-Japan UCITS ETFIE00B0M63730 1,671 0.74% p.a. Distributing Ireland Optimized sampling
Amundi MSCI Emerging Markets Asia UCITS ETF - EUR (C)LU1681044480 1,223 0.20% p.a. Accumulating Luxembourg Unfunded swap
Xtrackers MSCI EM Asia Index Swap UCITS ETF 1CLU0292107991 485 0.65% p.a. Accumulating Luxembourg Unfunded swap
Xtrackers MSCI AC Asia ex Japan Index Swap UCITS ETF 1CLU0322252171 466 0.65% p.a. Accumulating Luxembourg Unfunded swap
iShares MSCI EM Asia UCITS ETF (Acc)IE00B5L8K969 420 0.65% p.a. Accumulating Ireland Optimized sampling
SPDR MSCI EM Asia UCITS ETFIE00B466KX20 356 0.55% p.a. Accumulating Ireland Optimized sampling
Lyxor MSCI AC Asia Ex Japan UCITS ETF C-EURFR0010652867 314 0.50% p.a. Accumulating France Unfunded swap
HSBC MSCI AC Far East ex Japan UCITS ETF USDDE000A1W2EK4 245 0.60% p.a. Accumulating Ireland Optimized sampling
UBS ETF (IE) MSCI AC Asia Ex Japan SF UCITS ETF (USD) A-accIE00B7WK2W23 78 0.32% p.a. Accumulating Ireland Swap-based
Lyxor MSCI EM Asia UCITS ETF - AccLU1781541849 63 0.12% p.a. Accumulating Luxembourg Unfunded swap
HSBC MSCI EM Far East UCITS ETF USDDE000A1C22Q4 28 0.60% p.a. Distributing Ireland Optimized sampling
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Emerging Markets Asia -1.82% -1.44% -2.20% 2.26% 38.35%
MSCI Emerging Markets Far East -0.27% -0.91% -2.21% 2.46% 43.16%
MSCI AC Far East ex Japan -0.05% -0.95% -1.44% 2.86% 40.74%
MSCI AC Asia ex Japan -0.92% -1.02% -1.02% 2.88% 38.07%
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
MSCI Emerging Markets Asia -4.01% 24.79% 8.79% -0.05% 18.76%
MSCI AC Asia ex Japan -3.52% 24.22% 8.07% 0.45% 18.00%
MSCI Emerging Markets Far East -3.34% 25.59% 10.93% -1.28% 15.96%
MSCI AC Far East ex Japan -2.96% 24.08% 8.98% 0.21% 16.16%

Source: justETF.com; As of 30/09/18; Calculations in EUR based on the largest ETF of the respective index.