Although China’s confusing market and its exchange traded funds (ETFs) have been doing extremely well, many investors probably prefer to invest in Hong Kong’s market because of its simplicity, according to Carl Delfeld of Chartwell Partners and ETF XRAY. If you feel a little confused with China’s market, you’re not alone. Chinese markets offer different class shares for investors. A shares are for Chinese investors, H shares are Chinese companies listed in Hong Kong and B shares are foreign investors.

The good news is that even if the Chinese market is challenging for local investors, it doesn’t have to be for those of us here in the United States. We have several ETF investment options that are performing well thanks to China’s rapidly expanding population and economic growth:

  • iShares FTSE/Xinhua China 25 Index (FXI) – up 26.6% for the last three months
  • PowerShares Golden Dragon Halter USX China (PGJ) – up 26.8% for the last three months
  • SPDR S&P China (GXC) – up 27.4% for the last three months; this is a new China focused ETF that began trading at the end of March 2007.
  • iShares MSCI Hong Kong (EWH) – up 5.7% for the last three months

While Hong Kong’s market might be easier to understand, China’s ETFs have been outperforming EWH. As we saw in February, markets can be sensitive to what happens in China. Remember to set stop-loss points when you consider China for your portfolio.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.