Which China ETF to choose between Class A and all share classes?

📊 Investing
1

Hi, for long-term investment in China, would you prefer an ETF focused on A-shares (domestic market) or a more general ETF covering all types of stocks (like iShares MSCI China)?

Personally, I’m undecided because A-shares are more representative of the Chinese market, but from what I understand, these companies are smaller, less capitalized, and often not focused on technology. On the other hand, an ETF tracking a more general index includes the major international players (like Xiaomi, Alibaba, etc.), has a technology focus, the companies are more capitalized, but over the past five years, it has performed significantly worse than an index with only A-shares.

2

I would go for iShares MSCI China. It will be a lot more liquid and covers all the stocks.

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4

I also thought about this, but the Chinese market works a bit differently from the markets of developed countries, because it’s subject to significant government intervention. ‘A’ shares are smaller, but they are the most ‘protected’ by the government and offer more diversification compared to other types of shares, which are more correlated with the international economy.

5

I would also consider active funds such as FCSS or buying a handful of Chinese stocks instead.

ETFs are great for many things but I’m unconvinced by a passive approach to emerging markets.

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6

I’m also considering active funds but from what I see on T212 there are few funds available, the fund you suggest is unfortunately only in pounds, and I live in the Eurozone…