7 Best China ETFs for June 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.

» Interested in ETFs? Check out the best ETFs by one-year performance.

Best-performing China ETFs

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

Ticker

Company

Performance (Year)

KWEB

KraneShares CSI China Internet ETF

17.22%

CHIQ

Global X MSCI China Consumer Discretionary ETF

9.11%

PGJ

Invesco Golden Dragon China ETF

4.83%

FXI

iShares China Large-Cap ETF

2.54%

MCHI

iShares MSCI China ETF

2.09%

FLCH

Franklin FTSE China ETF

0.82%

GXC

SPDR S&P China ETF

0.08%

Source: Finviz. Data is current as of market close on May 31, 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 investors purchase shares in the fund. As the underlying assets rise and fall, so does the value of your fund investment.

» Dive deeper into investing in emerging markets.

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Researchers say investors often suffer from “home bias” — the tendency to purchase domestic stocks for their portfolio. And while U.S. stocks do make up about 63% of global equities

Morgan Stanley. The Case for International Stocks. Accessed May 10, 2024.
, exposure to international markets (especially a large player such as China) gives investors the benefit of diversification.

Investing in China ETFs carries risks, such as trade tensions with the U.S. and other geopolitical factors. 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 0.77%

    ETF.com. China ETFs. Accessed May 10, 2024.
    .

Important note: Leveraged China ETFs use financial derivatives and borrowed cash to make predictions on future prices. These types of ETFs are riskier than traditional ETFs and should be approached with caution. This is also true of 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 are less appropriate for a buy-and-hold strategy favored by many investors saving for the long term.

» MORE: Investing in ETFs vs. mutual funds

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 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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