Emerging market ETF investors, though, already have some exposure to China, but most broad ETFs only include Chinese H-shares, or Hong Kong-listed stocks, and Chinese equities listed in the U.S. For example, China makes up 26.6% of VWO and 23.6% of EEM.
Looking ahead, emerging market investors may be concerned about the larger allocation to China as funds add A-shares positions, especially given the recent bout of volatility in Chinese equities.
Potential investors will also have to consider other risks associated with greater China exposure. For instance, most listed Chinese companies are government-backed firms, which may put the interests of the state over profitability. Beijing is also very heavy handed with its policies as witnessed in the recent bout of volatility.
Nevertheless, the emerging market is trying to implement a wide range of economic reforms, notably a shift toward a more domestic-oriented growth model, and manage a slowing economy.
For more information on the developing economies, visit our emerging markets category.
Max Chen contributed to this article.