While Chinese ETFs have been on a downwards trend the last year, the last trading in April ended with some good news. On Friday, the Chinese government announced plans to promote the development of the tech sector, which investors saw as a sign that the recent crackdown on the sector will be coming to an end, and that things may be turning around for Chinese stock market as a whole. The major Chinese ETFs ended Friday in the green, compared to major US ETFs which were in the red.
Here is a look at 5 ETFs focused on Chinese stocks, sorted by returns in the last year. For comparison, VOO and QQQ have returned -0.58% and -7.48% during the same time period.
5. SPDR S&P China ETF (GXC), -36.50% in the last year
This SPDR ETF tracks the S&P China BMI Index, which consists of companies that are publicly traded companies based in China, but available to foreign investors. The top three holdings in this ETF are Tencent Holdings (00700), Alibaba Group Holding (BABA), and Meituan Class B (03690).
- Net Assets: $1.31 billion
- Date founded: 3/19/2007
- Expense ratio: 0.59%
- Yield: 1.67%
- Total holdings: 870
- Net fund flows (past year): $176.33 million
4. iShares MSCI China ETF (MCHI), -38.84% in the last year
This iShares ETF tracks the MSCI China Index, which consists of large and mid cap Chinese companies. The top three holdings in this ETF are Tencent Holdings (00700), Alibaba Group (09988), and Meituan Class B (03690).
- Net Assets: $6.00 billion
- Date founded: 3/29/2011
- Expense ratio: 0.57%
- Yield: 1.30%
- Total holdings: 631
- Net fund flows (past year): $2.54 billion
3. Invesco China Technology ETF (CQQQ), -48.42% in the last year
This Invesco ETF tracks the FTSE China Incl A 25% Technology Capped Index, which, as the name implies, is heavily focused on the Chinese tech sector. The top three holdings in this ETF are Meituan Class B (03690), Tencent Holdings (00700), and Baidu (09888).
- Net Assets: $918.11 million
- Date founded: 12/8/2009
- Expense ratio: 0.70%
- Yield: 0.00%
- Total holdings: 122
- Net fund flows (past year): $232.47 million
2. Invesco Golden Dragon China ETF (PGJ), -57.36% in the last year
This Invesco ETF tracks the NASDAQ Golden Dragon China Index, which tracks Chinese companies that are listed in the United States. The top three holdings in this ETF are Alibaba Group (BABA), JD.com (JD), and Baidu (BIDU).
- Net Assets: $228.27 million
- Date founded: 12/9/2004
- Expense ratio: 0.69%
- Yield: 0.00%
- Total holdings: 81
- Net fund flows (past year): $128.29 million
1. KraneShares CSI China Internet ETF (KWEB), -60.31% in the last year
This KraneShares ETF tracks the CSI Overseas China Internet Index, which similar to CQQQ, also tracks companies in the Chinese tech sector. The top three holdings in this ETF are Tencent Holdings (00700), Alibaba Group (09988), and JD.com (09618).
- Net Assets: $5.35 billion
- Date founded: 7/31/2013
- Expense ratio: 0.70%
- Yield: 0.00%
- Total holdings: 49
- Net fund flows (past year): $8.56 billion
The big question is: have Chinese ETFs reached their floor? For a long term investor, US focused ETFs have generally delivered much better results. For example, $10k invested in VOO a decade ago would be worth $35.74k today, compared to $13.99k for PGJ. However, for traders looking at near term opportunities, the signal from the Chinese government last week was a positive one. And that makes the 5 Chinese ETFs mentioned above look very attractive right now.