China has become a major economic powerhouse over the last decade.
And this trend is likely to continue in the near future.
As such, it makes sense for investors to diversify their investments into other markets outside of the U.S.
So if you’re looking for some Chinese exchange-traded funds to add to your portfolio, I’ve researched and compiled the 11 best China ETFs for Singapore investors to consider investing in.
11 Best China ETFs for Singapore Investors
|Best China ETFs||What It Tracks||Expense Ratio|
|KraneShares MSCI China Clean Technology Index ETF (KGRN)||MSCI China IMI Environment 10/40 Index, which studies the performance of clean energy companies.||0.79 %|
|iShares MSCI China A ETF (ECNS)||Investments whose yield and price-performance correspond to the MSCI China Small Cap Index.||0.59%|
|iShares MSCI China A ETF (CNYA)||MSCI China A Inclusion Index which studies the performance of the People’s Republic of China (PRC).||0.60%|
|Global X MSCI China Industrials ETF (CHII)||Replicates the performance of MSCI China Industrials 10/50 Index.||0.66%|
|Global X MSCI China Health Care ETF (CHIH)||Provides investment results that replicate yield and price performance of the MSCI China Health Care 10/50 Index before deducting expenses and fees.||0.65%|
|Global X MSCI China Real Estate ETF (CHIR)||Replicate the price and yield performance of MSCI China Real Estate 10/50 Index.||0.66%|
|BOC Shanghai Gold ETF (SHAU)||Price of gold and offer investors gold instruments that can diversify their portfolio risk.||0.5%(Management fee)|
|VanEck China Bond ETF (CBON)||Replicates the price and yield performance ChinaBond China High-Quality Bond Index-CHQU01TR.||0.5%|
|First Trust China AlphaDEX Fund (FCA)||The ETF seeks investment performance that replicates the price and yield minus fees and expenses of the NASDAQ AlphaDEX® China Index.||0.8%|
|Xtrackers MSCI All China Equity Fund (M1CNAL)||The performance of the MSCI China All Shares||0.5%|
|VanEck Vectors ChinaAMC SME-ChiNext ETF (CNXT)||The performance of top 100 liquid stocks on the ChiNext Market of the Shenzhen Stock Exchange||0.65%|
1. KraneShares MSCI China Clean Technology Index ETF (KGRN)
This fund was started on 13 October 2017 to track the MSCI China IMI Environment Index, which pursues the performance of securities whose 50% income are from environmentally valuable products and services.
As of 26 January 2022, the ETF has USD167.40 million under its management.
The ETF is designed to generate returns from investments in renewable and zero-emission energy.
Worth noting, this is one of the country’s fastest-growing technologies.
In this regard, 42% of the portfolio consists of consumables, luxury goods, apparel, electronics, and consumer services, 18% of which are technology-related, and 25% of which are industrial companies.
The environmental compositions include alternative energy, pollution prevention, energy efficiency, green building, and sustainable water.
The index acts as a benchmark or measure for individuals looking to invest in Chinese companies that contribute to an environmentally-sustainable economy through available natural resources.
Ideally, these companies also mitigate the effects of environmental degradation.
2. iShares MSCI China Small-Cap ETF (ECNS)
The fund tracks investments whose yield and price-performance corresponds or replicate the MSCI China Small Cap Index – the benchmark Index.
In addition, it seeks to invest at least 80% of assets in the securities of the base index.
It also looks forward to investing in assets similar to securities in the base index.
Generally, the index measures the performance of small-cap securities as represented by the B and H shares market.
In particular, the ECNS exposes investors to small public listed companies in China.
The fund was established on 28 September 2010 and has a geographic scope that includes; Asia Emerging taking 94.6%, Asia Developed 4.3%, Europe Emerging and the U.S at 0.2% and 0.8%, respectively.
Notably, Asian Emerging countries include; Malaysia, China, Taiwan, Thailand, India, Korea, The Philippines, and Indonesia.
Presently, it has up to USD 65.95 million assets under its management and a 0.59% expense ratio.
3. iShares MSCI China A ETF (CNYA)
The ETF tracks the performance of MSCI China A Inclusion Index or the Underlying Index, which measures the investment results of China as represented by class A-shares, available to international investors.
The ETF was started on 13 June 2016 and currently has USD892.44 million under its management with a 0.60% expense ratio.
On top of that, the fund has a diverse collection of stocks from consumer staples to financials to industrials, representing at least half of the total portfolio.
Typically, the CNYA is a large-cap fund with a mixed strategy that includes growth stocks and value stocks in its holdings.
Notably, the most prominent holdings of this ETF are class-A stocks such as the Kweichow Moutai Co. Ltd, which the Government partially owns.
It also comprises Class-A shares of China Merchants Bank Co. and Contemporary Amperex Technology Co. Ltd.
4. Global X MSCI China Industrials ETF (CHII)
The fund seeks to replicate the yield and price-performance before deducting expenses and fees of the MSCI China Industrials 10/50 Index.
In addition, it invests at least 80% of its holdings in underlying index securities, Global Depositary Receipts (GDRs), and American Depositary Receipts (ADRs) depending on the Securities in the underlying index.
The fund was started on 30 November 2009 and currently has USD29.56 million under its management.
In addition, it has a 0.66% expense ratio. The geographical breakdown of the fund is 98% Asia Emerging and 2.0% Asia developed.
The underlying index tracks the top companies in the MSCI China Index, the parent index.
Note that the ETF isn’t very diversified as these companies are categorised as being in the Industrial sector.
5. Global X MSCI China Health Care ETF (CHIH)
Global X MSCI China Health Care ETF (CHIH) provides investment results that imitate the yield and price performance of the MSCI China Health Care 10/50 Index before deducting expenses and fees.
The MSCI China Health Care 10/50 Index captures the mid to large capitalisation portion of securities in the MSCI China Index whose classifications fall under the Health Care sector.
Notably, this classification is per the Global Industry Classification Standard – GICS according to MSCIs Global Investable Market Index Methodology.
This Index includes eligible securities such as Class A, C, and H stocks.
It also includes foreign listings such as American Depository Receipts, P chips, and Red chips.
The Index also uses a 10/50 concentration constraint where each group’s entity is capped at 10%.
In addition, all group entities whose weight exceeds 5% are considered only if they don’t exceed 50% of the Index.
Finally, the fund was established on 7 December 2018 and currently has USD11.78 million and a 0.65% net expense ratio
6. Global X MSCI China Real Estate ETF (CHIR)
The ETF aims to invest in mid to large capitalisation sectors of the MSCI China Index, which fall under the Real Estate sector.
Such segments must fall under the Global Industry System (GIC) classification.
Additionally, the ETF looks to provide investment results that replicate the price and yield performance of the MSCI China Real Estate 10/50 Index as closely as possible.
The fund’s net assets currently stand at $8.06 million with a net expense ratio of 0.66%.
The REIT is popular with investors since it can provide higher dividends while considering medium to long-term capital appreciation.
7. BOC Shanghai Gold ETF (SHAU)
A turbulent stock market performance and unpredictability are the main reasons why Gold ETFs are popular with investors.
BOC Shanghai Gold ETF is under the management of BOC Fund Management Co Ltd and passively tracks the price of gold.
The fund’s objective is to closely track the price of gold and offer investors gold instruments that can diversify their portfolio risk.
To achieve this objective, the proportion of the ETF’s investment in gold spot contracts is at least 90% of its assets.
Over and above that, it invests in gold centralised pricing contracts whose trading takes part in the Shanghai Stock Exchange.
8. VanEck China Bond ETF (CBON)
VanEck China Bond ETF (CBON) seeks to achieve its investment objective by replicating the price and yield performance after deducting fees and expenses of the ChinaBond China High-Quality Bond Index-CHQU01TR.
The CHQU01TR mainly consists of Renminbi-dominated bonds from the People’s Republic of China. This is also issued by Chinese Credit, Quasi Governmental, and Governmental issuers.
This ETF gives you exposure to attractive yield returns and access to the largest bond market, as well as exposure to government-related bonds.
The advantage of government-based bonds is that they are generally considered risk-free and therefore ideal for risk-averse investors.
Since the fund’s inception on 11 October 2014, the number of holdings has grown to an impressive 101, and total net assets under management currently stand at $143.5M.
Likewise, it has maintained a lower net expense ratio of 0.50%.
9. First Trust China AlphaDEX Fund (FCA)
The ETF seeks investment performance that replicates as accurately as possible the price and yield before deducting fees and expenses of the NASDAQ AlphaDEX® China Index.
Like most funds, this ETF seeks to invest at least 90% of the assets in depositary receipts, common stocks, preferred shares, and REITs that make up the Index.
The Index also selects shares from the base index that can generate risk-adjusted returns or favourable alpha relative to classic indexes by utilising the AlphaDEX classification methodology.
The Fund’s top holdings include Industrials, Energy, and Basic Materials at 19.69%,16.52%, and 15.2%, respectively.
Geographically, the ETFs scope includes Asia Emerging, which is the largest market at 99.4%. The US takes up the rest of the market at 0.6%.
Currently, the ETF has $9.75million net assets with a 0.80% expense ratio.
10. Xtrackers MSCI All China Equity Fund (M1CNAL)
The Xtrackers MSCI All China Equity Fund seeks to replicate as closely as possible the performance of the MSCI China All Shares Index, which is its base index, before subtracting any fees.
Furthermore, it tracks the performance of the MSCI China All Shares Index, which includes Chinese companies from class A, B, H, P-chips, and Red-chips.
In addition, its objective is to reflect the performance of the shares listed in the Shenzhen, Hong Kong, and Shanghai exchanges.
The ETF was established on April 30, 2014, and currently has a total net assets value of $12,863,372.
It has also maintained a low net expense ratio of 0.50%.
The M1CNAL’s most significant sector allocations include Consumer Discretionary, Financials, Communication Services, and Industrials at 20.05%, 16.51%, 10.95%, and 10.46%, respectively.
Lastly, the ETF’s geographical exposure includes Asia 99.17%, Europe 0.49%, and North America 0.05%.
11. VanEck Vectors ChinaAMC SME-ChiNext ETF(CNXT)
The ETF Seeks to correspond as perfectly as possible with the price and yield performance of the ChiNext Index-SZ988107 Index before deducting fees and expenses.
The ChiNext Index is the base index that tracks the performance of the top 100 liquid stocks on the ChiNext Market of the Shenzhen Stock Exchange.
This Index consists of China class A shares.
Notably, these companies are some of China’s most innovative and technologically advanced.
Worth bearing in mind, the Fund has been around since July 23, 2014, and currently has total net assets of $34.4 million.
By investing in this ETF, you’ll have top exposure to attractive sectors such as new materials, healthcare, or IT, with little exposure to public enterprises.
In addition, the base Index has had a favourable history of high ROE than A-share small-cap benchmarks.
The 11 best China ETFs we listed were chosen because they offer investors exposure to a wide variety of Chinese stocks, including large market caps, small market caps, and mid-cap companies.
Our picks offer diversification across sectors, industries, and geographies.
At the same time, they provide access to a range of different types of Chinese investments.
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