Previously, investors in China could only gain exposure to U.S. markets through ordinary “Qualified Domestic Institutional Investor funds” – the QDII program grants a limited access for institutional investors, like banks, funds and investment companies, to invest in foreign-based securities. In the People’s Republic of China, the restrictions helped reduce conversion risks in a non-free floating currency.
ETFs have become a very popular investment vehicle in Chinese markets. According to BlackRock, China-listed ETFs have garnered $937.4 billion year-to-date. [China-Listed ETF Market Experiences Boom in Sector Plays]
Back in the States, U.S. investors can track the Nasdaq-100 through the PowerShares QQQ Trust (NYSEArca: QQQ). QQQ has a 0.20% expense ratio. Top holdings include Apple 12.0%, Microsoft 8.1%, Google 6.8%, Oracle 4.6% and Amazon 3.5%.
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.