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7 Ways to Invest in China with China ETFs

How to Invest in China with China ETFs

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Conducting business in China can be difficult. Investing in China doesn’t have to be. Not if you utilize a China ETF. Whether it’s a China foreign ETF or a Chinese currency ETF, you can gain exposure to China’s markets or hedge some of your foreign risk with China ETFs.

1. Investing in China Markets

There are many challenges to overcome when dealing with business and finance in China. Trade barriers, tax laws, and unique traditions to name a few. However if your investment strategy wants to gain exposure to China’s markets, look no further than a China market ETF.

An ETF like FXI, the iShares FTSE/Xinhua China 25 Index ETF is a great way to gain exposure to Chinese sectors like banking, construction, energy, and communications all in one investment.

2. Investing in BRIC Markets

Brazil, Russia, India, and China. Four regions that are very popular in the investment world. So much so, they’ve been given special attention with BRIC investment products. ETFs are no exception.

If you are looking to include China as part of your overall foreign investment strategy, but don’t want it to be your only targeted foreign region, a BRIC ETF may be a fit for your portfolio. EEB, the Claymore / BNY Mellon BRIC ETF is an example of a fund that can increase your foreign exposure to all four of these regions with one trade.

List of BRIC ETFs

3. Investing in Emerging Markets

If a BRIC asset is a little too limited and you would rather focus on emerging markets, there are plenty of emerging market ETFs that include China assets. Fore example, PXH, the PowerShares FTSE RAFI Emerging Markets ETF contains stocks for companies in China as well as Korea, Taiwan, and Brazil.

If you're interested in these types of funds, look no further than my list of emerging market ETFs.

4. Investing in Asian Markets

If you prefer to limit your foreign investments to the Asian region, there are ETFs that include China assets in this category as well. AAXJ, the iShares MSCI All Country Asia ex Japan Index ETF is a prime example of a fund targeting investments directly tied to Asia.

5. Investing with International Bond ETFs

Another way to increase foreign investment exposure to regions such as China is to utilize an international bond ETF. An investor looking to hedge China interest rates or create a steady income stream, might turn to a foreign bond ETF. These funds are also sound ways to diversify a portfolio or increase exposure to foreign markets.

If you're interested in these types of funds, look no further than The List of International Bond ETFs

6. Investing with Chinese Currency ETFs

There are a few foreign currency ETFs that directly include the Chinese Yuan. If you have risk in either Chinese markets, interest rates, or the Yuan itself, a Chinese currency ETF like CYB, the WisdomTree Dreyfus Chinese Yuan ETF may be a good way to protect your China investments.

7. Investing with Chinese Broad Currency ETFs

While there are currency ETFs that track only the Yuan, there are broad currency ETFs that track the Yuan and other currencies. If you want Yuan exposure and other currencies in one investment, a currency ETF like CEW, the WisdomTree Dreyfus Emerging Currency ETF may be the a fit for your strategy. Not only does it track the Chinese Yuan, but also the prices of 16 other regions, too.

So while business in China can be a difficult process, investing in China doesn’t have to be. It’s important to conduct thorough research before making any investment, but once you’re ready to get started with China ETFs, it’s only a matter of making the trade and reaping the benefits – one trade, instant China exposure

To help you, here is a List of China ETFs

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