What to Think About When Allocating to China ETFs

Bargain hunter investors who are interested in gaining exposure to Chinese markets should think about a few considerations before diving into a China ETF.

“We’ve got the index inclusion, which has taken the headlines, but more importantly than that is the fundamental story behind China,” Luke Oliver, Managing Director and Head of Capital Markets at DWS, said at the 2018 Morningstar Investment Conference.

Many investors and financial advisors remain underallocated to China as a part of their diversified international investment portfolio. Investors may include some China exposure as part of their emerging market position, but China A-shares, or company stocks that trade in mainland China, remain woefully underallocated in many investment portfolios.

However, things are changing as MSCI Indices begins incorporating China A-shares into its international indices, most notably its benchmark emerging market index.

“We want people to start looking at other ways that access China right now,” Oliver said.

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