It’s been a volatile year for foreign investors with exposure to China, but one fund has had an absolutely meteoric year despite negative price action driven by regulatory crackdowns. Here’s a look at the top five performing ETFs with targeted investment in China by flows.
- The KraneShares CSI China Internet ETF (KWEB) was head and shoulders above the rest of funds within the space, bringing in $7.9 billion year-to-date. It’s one of the biggest examples of investors buying the dip in 2021, with regulations out of China hitting the internet and technology sector particularly hard starting mid-year and the price of the fund dropping drastically. Investors piled into the fund, bringing in billions in flows in the latter half of the year in a vote of confidence in strong fundamentals for the sector. The fund carries an expense ratio of 0.76%.
- The iShares China Large-Cap ETF (FXI) is one of the original ETFs to focus on China and offers exposure to 50 large-cap companies within China while excluding mega-caps. The fund has brought in $1.84 billion year-to-date and is currently focused primarily in the financial and technology sectors. The fund carries an expense ratio of 0.74%.
- The iShares MSCI China ETF (MCHI) is a fund that offers market cap-weighted exposure across China’s large- and mid-cap companies and is primarily focused in technology, followed by financials. The fund offers broad investment into China and has brought in just over $1 billion year-to-date in flows. MCHI carries an expense ratio of 0.59%.
- The WisdomTree China ex-State-Owned Enterprisers Fund (CXSE) is a fund that seeks equity exposure to China but excludes state-owned enterprises based on the belief that private companies work more in the interest of shareholders. The fund has brought in almost $695 million year-to-date and is focused largely on the technology- and consumer-related sectors. CXSE carries an expense ratio of 0.32%.
- The Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB) is a fund that seeks to offer daily leveraged returns of 2x that of KWEB. So far this year, the fund has brought in $520 million in flows and carries an expense ratio of 1.30%.
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