How To Short China With ETFs

by: Sammy Pollack

Legendary investor Jim Chanos has again reiterated his call to short China. So far, Chanos has proved correct in his bearish stance on China. The best way for investors to go short China is by using ETFs. This article will discuss the various ways to short China using ETFs.

Long ETFs

One potential way for investors to bet against China is by going short ETFs that go long China.

iShares FTSE China 25 Index (FXI)

With a market cap of 6.1 billion, FXI is the most popular ETF for investing in China.

Morgan Stanley China A Share Fund (CAF)

CAF is unique in that it targets the Chinese A share market which has underperformed other China indexes.


GDC is similar to FXI, as it holds mostly large cap Chinese stocks.

Long Sector ETF

Investors can go short any of the following ETFs in order to bet against a specific sector of the Chinese economy.

Global X China Financials ETF (CHIX)

Global X China Consumer ETF (CHIQ)

Global X China Energy ETF (CHIE)

Global X China Industrials ETF (CHII)

Global X China Materials ETF (CHIM)

Global X China Technology ETF (CHIB)

Specifically, those who agree with Chanos's views on China should go short CHIX, as the financials will be big losers if Chanos' Chinese real estate predictions come true.

Short ETFs

ProShares Short FTSE China 25 (YXI)

YXI is one of the few unleveraged ETFs to go short China.

Leveraged Short ETFs

Direxion Daily China Bear 3x Shares (NYSEARCA:YANG)

ProShares Ultra Short FTSE China 25 (FXP)

These ETFs are designed for short-term bets, because over time, compounding has adverse effects on leveraged ETFs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.