Less real estate and more equities—that’s what analysts are seeing when it comes to investor trends in China. As such, this could help fuel China-focused exchange-traded funds (ETFs) as investors shift to more liquid investments.

Per a CNBC report, the “Chinese government’s efforts to tamp down speculation in property markets will mean that funds will flow to equities instead, allowing for more upside in onshore equities, an economist said on Tuesday.”

“We think the liquidity will likely go to the equity market,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

This sounds all too familiar for U.S. investors who lived through the housing crisis in 2008. Now, the Chinese government is looking to avert a similar crisis.

“That sent a very strong signal to investors (to) don’t speculate in the property market, then equity became the only option available for the general public,” said Zhang.

ETF investors looking to get Chinese equity exposure can consider the 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, which is designed to capture large- and mid-capitalization representation across all China securities listed in Hong Kong, Shanghai, and Shenzhen.

CN Chart

CN data by YCharts

Here are two more options to consider as China continues its recovery from the Covid-19 pandemic:

  1. Xtrackers CSI 300 China A-Shares ETF (NYSEArca: ASHR): seeks investment results that correspond generally to the performance, before fees and expenses, of the CSI 300 Index. The fund will normally invest at least 80% of its total assets in securities of issuers that comprise the underlying 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. The underlying index includes small-cap, mid-cap, and large-cap stocks.
  2. Xtrackers MSCI China A Inclusion Equity ETF (NYSEArca: ASHX): The investment seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI China A Inclusion Index. The fund will normally invest at least 80% of its total assets in securities (including depositary receipts in respect of such securities) of issuers that comprise the underlying index. The underlying index 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.

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