Dragon Catches Fire: China ETFs Bounce Back | ETF Trends

After a precipitous sell off since the June highs, some have warmed up to Chinese equities, finding value in China stocks and country-specific exchange traded funds.

ETF investors who are interested in the Chinese market have a number of options to choose from. For instance, the iShares China Large-Cap ETF (NYSEArca: FXI) 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).

Over the past month, FXI gained 12.2%, GXC rose 11.1% and MCHI returned 11.5%.

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).

Over the past month, ASHR increased 12.4%, KBA added 10.5% and PEK advanced 9.7%.

Traders have cut bearish bets on A-shares ETFs to a four-month low on expectations that the latest policy effort to stimulate China’s economy and a postponed U.S. interest rate hike would help stabilize the A-shares market, reports Taylor Hall for Bloomberg.

Specifically, short interest in ASHR fell 9.2% as of Friday, the lowest since June 9 and down from a record 25% in August.

The A-shares ETFs continued to advance on the New York Stock Exchange, along with Chinese stocks in Hong Kong, as China’s markets remained closed until October 8 for a week long holiday. Chinese equities were strengthening after Beijing took steps to support specific sectors.