Chinese ETFs slide as Shenzhen shuts down

RomoloTavani/iStock via Getty Images

Chinese exchange traded funds started the week on their heels as COVID concerns sent stocks in mainland China tumbling. The Shenzhen Composite Index finished -3% overnight, as Chinese authorities placed a lockdown on the city of Shenzhen and province of Jilin due to spikes in COVID-19 cases.

Falling alongside the Asian index are the Invesco China Technology ETF (NYSEARCA:CQQQ), iShares MSCI China ETF (NASDAQ:MCHI), iShares China Large-Cap ETF (NYSEARCA:FXI), and the KraneShares CSI China Internet ETF (NYSEARCA:KWEB). In early trading CQQQ is -7.3%, while KWEB fell 7.2%, MCHI dropped 4.1%, and FXI has dipped 3.8%.

CQQQ, the tech-focused Chinese ETF, is similar in nature to KWEB, which provides access to businesses involved in internet and internet-related technology Chinese firms. Both offer access to Chinese tech and come with a 0.70% expense ratio. KWEB, meanwhile, represents one of the largest funds in the group, with $4.86B AUM. CQQQ provides a more balanced approach with 118 holdings versus KWEB’s 54.

MCHI, on the other hand, is a broad-spectrum fund that offers investors access to large and mid-sized Chinese equities that are available to international investors. The fund also has $4.86B assets under management ETF and the cheapest expense ratio at 0.57%.

FXI is a pure large-cap China play as the fund exposes the 50 largest Chinese stocks that trade on the Hong Kong Stock Exchange. FXI is also the most expensive of all four funds, with an expense ratio of 0.74%.

For a greater breakdown and understanding of CQQQ, MCHI, FXI, and KWEB, see Seeking Alpha’s quantitative and fundamental analysis on all four ETFs.