Getting equities exposure in China doesn’t mean investors must settle for domestic companies. With the KraneShares MSCI All China Index ETF (KALL), investors get core exposure from Chinese companies listed in various locales.

By getting exposure to companies listed in various parts of the globe, investors may heighten their diversification benefits. Chinese companies experiencing strength from other locations, in the U.S. for example, can nullify weakness domestically and vice versa.

KALL seeks to provide investment results that, before fees and expenses, track the price performance of the MSCI China All Shares Index. The index seeks to track the equity market performance of companies based in China and listed in Mainland China, Hong Kong, and the United States.

The KraneShares website offers the following advantages for getting broad Chinese equity exposure:

  • The increased availability of Chinese equities to foreign investors over the past few years has brought about the rise of China as an asset class.
  • China has the world’s second largest economy and equity market, with a capitalization of over $7.2 trillion.
  • 2018 is the first year that Chinese companies listed in Hong Kong, Mainland China, and the United States will be reflected in the MSCI Emerging Markets Index, which is tracked by over $1.8 trillion in assets.
  • Only 2% of China’s Mainland stock market is owned by foreigners.

KALL Chart

Leveraging National Self-Reliance

Getting core Chinese equity exposure means investors can leverage the country’s aggressive plans for self-reliance. With its eye on becoming the global economic power through sheer volition, the country looks to dominate in areas like science and technology.

“As long as we can stand on our own and be self-reliant, and maintain a vibrant flow of goods and services domestically, then we will be invincible no matter how the storm changes internationally,” said Chinese president Xi Jinping. “We will survive and continue to develop, and nobody can beat us or choke us to death.”

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