3 ETFs to Consider as Investors Pile Into Chinese Equities in 2021

A bullish sentiment could be fueling a stronger demand for Chinese equities in 2021. ETF provider DWS offers several funds to satiate appetites for high-quality A-shares and broader equity exposure in China.

Check out these the funds below:

  1. Xtrackers CSI 300 China A-Shares ETF (NYSEArca: ASHR): seeks investment results that correspond to the CSI 300 Index. The underlying index is designed to reflect the price fluctuation and performance of the China A-Share market and is composed of the 300 largest and most liquid stocks in the China A-Share market.
  2. Xtrackers MSCI China A Inclusion Equity ETF (ASHX): seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI China A Inclusion Index, which is designed to track the equity market performance of China A-Shares that are accessible through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program.
  3. Xtrackers MSCI All China Equity ETF (CN): CN seeks investment results that correspond to the performance, before fees and expenses, of the MSCI China All Shares Index. The underlying index is designed to capture large- and mid-capitalization representation across all China securities listed in Hong Kong, Shanghai, and Shenzhen.

In the graphic below one can see why Chinese equities have been in favor as the second largest economy continues to heal from the pandemic. ASHX leads the pack with a one-year gain of almost 50%, while ASHR comes in at 43% and CN at about 33%.

ASHR Chart

Betting on an Extended Rebound

As more investors pile into Chinese equities in the new year, strength will only beget more strength. As a vaccine continues to roll out globally, the second largest economy stands to benefit in a big way.

“China’s benchmark index the CSI 300, which tracks shares on the Shanghai and Shenzhen stock exchanges, jumped nearly 2% as investors around the world rush for exposure to the People’s Republic’s economic recovery from the Covid pandemic,” said Nigel Green, the chief executive of deVere Group. “These fresh impressive gains for Chinese equities come after an incredible year in 2020 in which the index added more than 27%.”

“This trend of piling into Chinese stocks can be expected to continue throughout 2021 as investors seek growth,” Green added. “China’s rebound is quite remarkable, compared to other major economies, many of which are once again rolling out stricter restrictions to stop the spread of Covid amid a tsunami of new cases.”

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