China ETF

AAA

DEFINITION of 'China ETF'

Exchange-traded funds that invest in and track the equity stakes of China-based companies, either through investment on Chinese stock exchanges or via foreign-listed shares such as American depositary receipts (ADRs). Because of regulations against certain types of foreign investment and the existence of many large state-run companies operating in China, ETFs that represent the nation are limited in their investment choices to companies that have public shares to offer. As with all ETFs, intraday trading is offered for China ETFs, which makes for increased liquidity and flexibility over China-based mutual funds.

INVESTOPEDIA EXPLAINS 'China ETF'

By holding an ETF, investors can increase exposure to China and still achieve the diversification of an index. Many investors are drawn to China because of its world-leading population and strong economic growth, but because many of the nation's companies are still state-run or private, China ETFs are skewed in their sector allocation toward sectors that have seen public offerings of stock. These sectors include telecommunications, financials and energy. As the Chinese markets open up, ETFs that model the region will become more diversified by sector.

VIDEO

RELATED TERMS
  1. Special Administrative Region - ...

    Unique geographical areas with a high degree of autonomy set ...
  2. Baidu

    The dominant Chinese internet search engine company. Baidu offers ...
  3. National Social Security Fund (China)

    A government-controlled investment fund established primarily ...
  4. China Credit Information Service ...

    One of the chief credit informational agencies in Taiwan. China ...
  5. China Concepts Stock

    The stock of a company whose assets or earnings have significant ...
  6. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
Related Articles
  1. Investing Basics

    Investing In China

    Investment opportunity is huge in China. However, investors should consider the pitfalls, understand the risks and rewards, focus on shareholder-friendly companies and stick to investments they ...
  2. Mutual Funds & ETFs

    4 Ways To Use ETFs In Your Portfolio

    To take full advantage of these vehicles, you need to know how they can fulfill certain strategies.
  3. Mutual Funds & ETFs

    Sharpen Your Portfolio With Intelligent ETFs

    Intelligent ETFs are innovative funds that pursue above-average returns and can be similar to actively managed mutual funds.
  4. Mutual Funds & ETFs

    Finding Fortune In Foreign-Stock ETFs

    Think beyond your borders to reduce the impact of local market downturns.
  5. Mutual Funds & ETFs

    ETFs: How Did We Live Without Them?

    These funds burst onto the scene in 1993 and have continued to provide new opportunities for investors since.
  6. Mutual Funds & ETFs

    3 Steps To A Profitable ETF Portfolio

    Achieve your investing goals with this simple process.
  7. Active Trading Fundamentals

    Can you short sell ETFs?

    ETFs (an acronym for exchange-traded funds) are treated like stock on exchanges; as such, they are also allowed to be sold short. Short selling is the process of selling shares that you don't ...
  8. Investing

    I live in the U.S. How can I trade stocks in China and India?

    Foreign markets have always been an object of envy to domestic investors because the indexes in some foreign countries have produced double- to triple-digit returns in the past. For example, ...
  9. Mutual Funds & ETFs

    Exchange-Traded Funds (ETFs)

    This vehicle combines the diversification of a mutual fund with the flexibility of a stock. Learn more about them here.
  10. Investing in emerging market bonds might sound creative and fun, but sometimes it’s more profitable in keeping it simple and close to home.
    Mutual Funds & ETFs

    The EMB Emerging Market Bond ETF: Use Caution

    Investing in emerging market bonds might sound creative and fun, but sometimes it’s more profitable in keeping it simple and close to home.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center