Entering text into the input field will update the search result below

Is The S&P China ETF A Good Choice For Exposure To Chinese Stocks?

ALT Perspective profile picture
ALT Perspective


  • While China as an investment destination has become irresistible, it may be prudent to go with an ETF than individual stocks.
  • The SPDR S&P China ETF may be mistaken as a tech ETF with seven of its top 10 holdings being tech companies.
  • Overall, the GXC ETF portfolio consists of 884 holdings in total as of December 30, 2021. This is more than the larger China ETFs that I have covered previously.
  • The SPDR S&P China ETF has performed similarly to the iShares MSCI China ETF over the various periods of comparison, though the former has a slight edge.
  • If readers don't already hold any China ETF and are keen on buying some, the MCHI ETF offers certain advantages over the GXC ETF.

young asian woman driving a sports car

imtmphoto/iStock via Getty Images

Why go for an ETF instead of individual stocks?

2021 has been a painful year for shareholders of Chinese stocks in general. Alibaba Group Holding Ltd (BABA) had appeared to be the sole target of Beijing after the authorities

This article was written by

ALT Perspective profile picture
I am honored to have been categorized as a 5-Star financial expert and ranked among the top 2% of financial bloggers on TipRanks in 2017/18. For a period, I was among the top 3 “Opinion Leaders” for Insider Ownership and Services, as well as top 5 for Long Ideas and Fund Holdings. I am an avid reader of market news and company publications with the aim of improving my investment acumen. I enjoy expressing my findings and opinions through writings. My appreciation and understanding of business strategies improved to a whole new level since completing an MBA (Distinction) from a FT100 MBA school. I have worked in companies with businesses that span multiple industries, according me with the exposure to a myriad of sectors.Check out my Author's Picks and over 190 Editor's Picks, among the highest in Seeking Alpha, if not the most.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA, BIDU, JD, NTES, TCEHY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (21)

ALT Perspective profile picture
ALT Perspective
Article Update 04 Jan. 2022
Thank you for reading. In the section "Is The S&P China ETF A Good Investment?", I mentioned "Which Are The Best Chinese Stocks To Watch In 2022?"

I submitted this GXC article a day after the mentioned article. However, there is some back and forth with the editors on the latter, so the publication is delayed. If you are keen to read this when it's out, you are welcome to 'follow' me.
@ALT Perspective Thank you for both articles. Happy New Year!!
ALT Perspective profile picture
@Diversity is Overrated You are most welcome. Happy New Year!!
SA-NJ52 profile picture

Thanks for your comments.


You obviously never read my comments. Let's try it again.

Item 3 explains the havoc that EVs will bring onto the residential electrical grid. The upgrade costs will be staggering.

As an Engineer, I know that one cannot simply backfeed electricity from my F150 back into the house.

Now if you believe, as I think you do, that the unicorns can push the electricity bi-directionally over rainbows, then there is no issue.

The reality is that you need to re-work your service starting with the installation of an ATS to switch power between sources.

If you are going to do that then you should put in a real gas-powered APU that will service your house long after the batteries in your F-150 die.

SA-NJ52 profile picture
@Pierre Rossouw

There are simply too many players - oil companies, engine mfgrs like CYD and CMI, trains, trucks, WPRT, etc. - who see hydrogen as a solution.

KEP is moving to hydrogen. KRW and TM are also launching hydrogen vehicles. Once again, the Koreans and the Japanese will show us how it is done.

I have done extensive research on this and the tide will turn very quickly as electric vehicles are really not a solution for heavy transport.

It is far simpler to put in the point to point hydrogen infrastructure for trains and trucks than it is for cars.

Now will I see hydrogen vehicles in my lifetime? I hope so but we will soon be ass deep in EVs. Look at the market cap for RIV who have made 300 vehicles to date.

Like it or not, Mr. Market has told me that EVs are the priority now.

I have positioned my portfolio to take advantage of this craziness until hydrogen is a reality.

Back to hydrogen. There is no Elon Musk of Hydrogen. The NKLA guy was a fraud and hurt the industry.

Finally what happens to upset the EV applecart when China invades Taiwan? The Olympics are a few weeks away. After that, all bets are off in my view.

What will that catastrophic event do to the supply of rare earths and solar panels?

Finally, I agree with you on helium and I am building a helium portfolio.

SA-NJ52 profile picture
@Pierre Rossouw

If you actually know something about energy you will know that EVs will end being a major disaster.

1. I live in a cold climate. The last thing I want is a car with a giant battery.

2. EVs consume vast quantities of copper, lithium and other metals that we don't have or they are found in China.

3. EVs will require massive infrastructure upgrades to the residential grid to allow for 240 V charging. Read my previous posts on this. There are proposed tax credits for buying an EVs that is made in a union shop. There is carbon pricing. What about tap fees for those people who need utility upgrades to charge their EVs. My guess is that I will pay extra to subsidize others for this infrastructure upgrade.

4. EVs run on electricity not rainbows and unicorns that the greenies believe. We do not have the electrical generating capacity now. Solar panels are made in coal powered factories in China. Windmills are intermittent...look at what happened in the UK. We get no industrial benefits from EVs that we would with hydrogen.

5. EVs are not a solution when we have bad weather. Having an EV after the snowstorm in Texas or the hurricane in Louisiana would have been horrible as it sat dead in your garage.

Hydrogen is a real solution until I can get AAA pour a can of electricity into my EV when it is -40 C outside.

Now when the unicorns can push electricity over rainbows, then EVs may be a good solution.

Pierre Rossouw profile picture
@gandc Thank you for your very comprehensive and well thought out reply. I understand and also fully support every one of your points. Fully. I'm with you on this. i really mean it.

Except on one point: As a scientist (with three internationally accredited postgraduate degrees), and as one who somewhat understands and works with the laws of the universe, I must admit that nobody has ever successfully contradicted the laws of thermodynamics. If you or anyone else ever does, please let us know. But that is is a distraction and a bit cynical.

My response concerns the idiotic American obsession with politics to overrule science.

I'm pleased that this has brought about your five points regrading EVs. I fully support and endorse these. Just that I do not see H2 as the solution. I wish it were. I'm more concerned that the total supply of Helium on Earth is finite: What we can recover ends up in lost above our atmosphere, unrecoverable. We need this for medical science, for CAT scans and the like, please don't let's waste it on party balloons.

But thanks for your considered response. It is important.
@gandc The Daily Double: Astute and Entertaining. Congrats and enjoy your weekend.
@gandc #5. EVs sit useless when the grid fails because Texas doesn't know how to weatherize Natural Gas plants & coal generating facilities.

I mean, most of your other points are pretty poorly thought out, but this is the worst.

The big problem (challenge?) with most renewables is intermittency...which you astutely noted. Of course, for 90% of drivers, the intermittency of solar & wind are a feature, not a bug. Charge your F150 when the sun is shining and the wind is blowing...then plug your house back into your pickup when the Texas regulators let the fossil fuel grid fail.

Honestly, its shocking that after the Texas debacle that ANYONE would still want to rely on our old obsolete grid with dumbass regulators to try to keep the heat on in their house.

Uri is the case for EVs. Not an objection.
Cognoscente profile picture
Great as usual!
Nice article... and what is your opinion about the current valuations vs historical valuations?
Thank you so much Alt Perspective, for listing these Chinese ETFs and educating me. While I am not a keen investor in ETFs, now I can explore more in this sphere. Thanks again for such a good article.
ALT Perspective profile picture
@Gemma Hon Thank you for reading. Glad it helps. No one knows when it bottoms, and the whole tech space is wobbly, potentially triggering a domino effect. ETF may be more appropriate to avoid single-name concentration.
SA-NJ52 profile picture
I sold my BABA at a loss but I kept FXI and KWEB.

ETFs may be the best way to hold these losing stocks. The only Chinese stock I own is CYD for what may be a good hydrogen play.

Pierre Rossouw profile picture
@gandc Hydrogen, as a source of prime mover energy, whether Chinese or not, is something I would avoid as an investment. At least for minimum ten years ahead. Nobody has ever made money from Hydrogen, other than the US selling it to the Zeppelin business in the 1930s.
Written as an energy systems scientist.
ALT Perspective profile picture
@gandc KWEB seems to be making bolder bets on newer names than the other Chinese ETFs. It could reap bigger gains if proven right but the same in reverse if it's wrong.
ALT Perspective profile picture
@Greenhorn Investor Thanks for reading and commenting!
Chris Lau profile picture
Happy new year! Please consider covering BABA tagged primary and real estate for macro coverage centered around Evergrande.

Evergrande will proactively communicate and handle the case in accordance with the demolition order from the local government in Hainan province, according to a statement posted on its unit’s WeChat page.

The developer added that the order affects 39 buildings and has no impact on the rest of the development.

Beijing Sends Warning With Evergrande (8:41 a.m. HK)

China’s authorities are sending a clear signal that there will be no let up in their crackdown on the property market, meaning the industry will remain a concern for investors for some time to come.
ALT Perspective profile picture
@Chris Lau Happy New Year! Real estate is hard to comment as there's the unknown central government actions and then the specific provincial execution and local programs. Houses will be built, the question is by who? Maybe the old adage rings true here: in a gold rush, sell shovels.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.