Best ETFs to Hedge Further Weakness in China

With no real end to the trade spate in sight, investors may continue to capitalize off the weakness in Chinese markets or at least hedge against further risks through bearish or inverse ETFs.

For instance, the Direxion Daily CSI 300 China A Share Bear 1x Shares (NYSEArca: CHAD) was the first inverse A-shares ETF to trade in the U.S. The ETF is designed to deliver the daily inverse performance of the CSI 300 Index.

The ProShares Short FTSEChina 50 (NYSEArca: YXI) takes the simple inverse or -100% daily performance of the FTSE China 50 Index, the same underlying benchmark for FXI. The ProShares UltraShort FTSE China 50 (NYSEArca: FXP) attempts to deliver double the daily inverse or -200% returns of the same index. More aggressive traders may look to something like the Direxion Daily FTSE China Bear 3X Shares (NYSEArca: YANG), which takes three times the inverse or -300% daily performance of the FTSE China 50 Index.

For more information on the Chinese markets, visit our China category.