Through the QFII system, foreign investors are able to access Chinese A-shares, which trade on the Shanghai Stock Exchange and the Shenzen Stock Exchange and are typically only available to mainland citizens. A-shares are also only quoted in the Chinese renminbi currency.
Unlike other China ETFs, these A-Shares ETFs track companies listed in China’s stock exchange, whereas the other options track companies listed on Hong Kong or U.S. exchanges.
For example, the iShares China Large-Cap ETF (NYSEArca: FXI) tracks 25 of the largest Chinese stocks that trade on the Hong Kong exchange. The SPDR S&P China ETF (NYSEArca: GXC) follows 500 stocks that are listed on the New York and Hong Kong exchanges.
For more information on China, visit our China category.