The Strongest China ETFs This Year

Faster than expected growth in China services industry data led to a rally of more than three percent in the Hang Seng China Enterprises Index on Tuesday.  This jump marks a new year-to-date high for Chinese equities and underscores strong fundamentals in this massive Asian economy.

Some ETFs focused on China are seeing corresponding gains.

iShares China Large Cap ETF FXI

The services industry news sent FXI more than three percent higher as well. This widely followed index of 25 Chinese stocks recently announced it would be broadening its scope to include 50 total holdings, beginning on September 19. 

Related Link: Emerging Market ETFs Lead Q3 Fund Flows

So far this year, FXI has gained just over 11 percent and appears to have established a new uptrend fueled by money flowing back into emerging market stocks. While that gain is significant, several other key China ETFs have posted even stronger returns this year.

Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap ETF ASHS

The newly released ASHS has jumped over 25 percent in just a few short months since its May debut.  This ETF tracks 500 small company A-share holdings in mainland China, which have historically been difficult to access for foreign investors.  However, the significant relative strength makes this an ETF to watch closely as a complement to large-cap holdings.

Deutsche X-trackers Harvest MSCI All China Equity ETF CN

Another excellent performer this year has been CN which hails from the same fund family as ASHS.  This ETF is designed to access a wide array of varying share classes in China that include: A-shares, H-shares, B-shares, Red chips, and P chips along with China securities that are listed in the United States.  Since its April debut, CN has risen more than 19 percent.

KraneShares CSI China Internet ETF KWEB

Lastly, KWEB is a more established fund that is exclusively dedicated to tracking internet-related search, retail, and social media companies in China.  This sector-specific offering has gained more than 19 percent on the growth of these fast paced technology companies.

In addition, KWEB has announced that it will be adding Alibaba, one of the largest internet companies in the world, to its portfolio 11 days after its initial public offering.  That move will further solidify this ETF as a top contender of China’s internet consumers. 

All of these ETFs offer a unique way to invest in a fast-paced Asian economy with tremendous growth potential in the years ahead.