Over 260 U.S.-listed ETFs feature some exposure to China with marquee names including the iShares China Large-Cap ETF (NYSEArca: FXI), which is the largest China-related ETF that tracks Chinese companies listed on the Hong Kong stock exchange. Similarly, other China H-shares ETFs options include the SPDR S&P China ETF (NYSEArca: GXC) and the iShares MSCI China ETF (NYSEArca: MCHI). [Someone is Still Bullish on China]
Additionally, investors can take a look at China A-shares ETFs that track mainland Chinese stocks traded in Shanghai and Shenzhen, including the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR), KraneShares Bosera MSCI China A ETF (NYSEArca: KBA) and Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK).
Investors may target some of the cheapest emerging markets and that includes Chinese stocks trading in Hong Kong, or A-shares, as FXI, GXC and MCHI all sport P/E ratios below that of the MSCI Emerging Markets Index. [Cheap EM ETFs]
“We also see opportunities in Asia’s emerging markets, despite our more cautious stance on the EM asset class more broadly,” writes Russ Koesterich, global chief investment strategist and head of model portfolios & solutions at BlackRock. “Many of these markets have sold off in concert with China, leaving valuations once again cheap, including the Chinese H-Share market listed in Hong Kong.”
Memani also favors Chinese internet companies where shares have declined over 30% since last September, pointing out that valuations between Chinese companies like Alibaba (NasdaqGS: BABA) and their American counterparts are “astounding.”
Investors can track Chinese Internet names through sector-specific ETFs, like the KraneShares CSI China Internet Fund (NasdaqGM: KWEB) and the Guggenheim China Technology ETF (NYSEArca: CQQQ). BABA is 9.8% of KWEB and 8.8% of CQQQ. CQQQ has a 14.4 P/E and a 1.6 P/B, whereas the Nasdaq-100 is trading at about a 20.0 P/E and a 4.1 P/B.
For more information on the developing economies, visit our emerging markets category.
Max Chen contributed to this article.