Moreover, as mainland investment assets flow into Hong Kong exhanges, the premium on mainland A-shares over Hong Kong H-shares could continue to decline, potentially bolstering returns in the H-shares market.
SEE MORE: Treading Carefully With China ETFs
Currently, China A-shares ETFs, like the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: PEK) and db X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR), are trading with higher valuations relative to H-shares-related ETFs, like the iShares China Large-Cap ETF (NYSEArca: FXI), which tracks Chinese companies listed on the Hong Kong exchange. PEK has a 14.38 price-to-earnings ratio and ASHR shows a 12.67 P/E, compared to FXI’s 9.19 P/E.
For more information on China, visit our China category.
iShares China Large-Cap ETF