7 Best China ETFs for April 2024

These are the top performing China ETFs, which can provide U.S. investors with international diversification in their portfolios.
Alana Benson
Kevin Voigt
By Kevin Voigt and  Alana Benson 
Updated
Edited by Chris Hutchison
GettyImages-959758016-investing/best-china-etfs

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Investors looking to diversify their portfolios geographically have a range of options, and getting into China — the world's second-largest economy — can be particularly appealing. If so, one route is to buy China exchange-traded funds.

Best-performing China ETFs

Below is our list of best-performing China equity ETFs.

Ticker

ETF Name

5 Year

KBA

KraneShares Bosera MSCI China A 50 Connect Index ETF

5.48%

KGRN

KraneShares MSCI China Clean Technology Index ETF

2.31%

CHIQ

Global X MSCI China Consumer Discretionary ETF

1.81%

CNYA

iShares MSCI China A ETF

0.29%

AFTY

Pacer CSOP FTSE China A50 ETF

-0.66%

ASHR

Xtrackers Harvest CSI 300 China A-Shares ETF

-1.55%

ASHS

Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF

-1.72%

Source: VettaFi. Data is current as of April 1, 2024, and is for informational purposes only.

What are China ETFs?

China ETFs are exchange-traded funds that track publicly listed Chinese companies and give investors exposure to Chinese markets without having to directly purchase those stocks. Instead, the issuing company purchases the underlying asset (such as stocks, bonds or currency), and fund investors purchase shares in the fund. As the underlying assets rise and fall, so does the value of your fund investment.

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Researchers say investors often suffer from “home bias” — the tendency to purchase domestic stocks for their portfolio. But U.S. stocks make up only about 56% of global equities. Exposure to international markets, especially a large player such as China, gives investors the benefit of diversification as one region’s markets may rise while others fall.

Investing in China ETFs carries risks, such as trade tensions with the U.S. and the aftermath of the coronavirus outbreak. Still, many investors are placing long-term bets on the world’s second-largest economy.

» Learn more: What are ETFs?

How to invest in China ETFs

Here’s how to buy shares in a China ETF:

Step 1: Find a China ETF

Search for China ETFs on your broker's website. (No broker? Here's how to open a brokerage account.)

Step 2: Analyze the ETF

Some things to check before purchasing shares in a China ETF:

  • Type of China ETF. There are many China ETFs available to U.S. investors, including equity, fixed income and currency assets classes. Some focus on the total China market, while others focus on company size or a particular sector, such as technology, health care and real estate.

  • Expense ratio. This annual fee is paid out of your investments in the fund, so the lower the expense ratio, the better. The average expense ratio for China ETFs is 0.7%, according to ETF.com.

Important note: The average investor should avoid leveraged China ETFs, which use financial derivatives and borrowed cash to make predictions on future prices. The average investor also shouldn't consider China exchange-traded notes, or ETNs, which are secured debt obligations. Unlike ETFs, these funds don’t actually own the underlying asset and have a higher risk of default. These investments aren’t good for a buy-and-hold strategy favored by many investors saving for the long term.

Step 3: Buy the China ETF

You can purchase ETFs just like you’d buy a company stock — for both, you need an online brokerage account to buy and sell shares.

To see brokerages with a broad ETF selection, check out our full list of the best brokers for ETF investing.

Learn more about sector ETFs:

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Neither the author nor editor held positions in the aforementioned investments at the time of publication.
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