ETF Investors Surprising Reaction To China's Rally

The greater gains in the Shenzhen may help explain the outperformance in China A-shares compared to H-shares as the China A-shares ETF benchmarks are comprised of both shares listed on the Shanghai and Shenzhen indices.

The Chinese equities are rallying after Beijing intervened in the financial market to stem exodus. The government tried to stabilize domestic markets by pumping money into state-backed funds that bought blue-chip stocks, clamping down on short sellers and suspending initial public offerings.

Additionally, mainland stocks strengthened last month in anticipation that officials would expand easing measures after the government revealed growth slowed to 6.9% in the third quarter, below its target of around 7%.

iShares China Large-Cap ETF

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Max Chen contributed to this article.