EWH also has to contend with U.S. interest rate policy because the Hong Kong dollar is pegged to the U.S. dollar. Additionally, the ETF’s significant finance, real estate, and construction makes its vulnerable to changes in Fed policy. The Chinese territory has an AAA credit rating.

China H-shares-related ETFs are also showing more attractive valuations relative to the China A-shares market where the Shanghai Composite and the small-cap Shenzhen Composite are still relatively expensive, even after the correction, trading at an average price-to-earnings ratio of about 20 and 50 times, respectively. [Interested in China? H-Shares ETFs Are a Cheap Play.]

However, EWH lost more than 5% last week and hit a 52-week low on Friday.

iShares MSCI Hong Kong ETF