Terminology, Trading

Trading Vehicles for the Chinese Market

I was finding out a bit more about a China A50 ETF, and thought it’ll be good to compile a little information.

Main Types of Shares for Chinese Companies

  • A Shares
    • Traded on the Shanghai and Shenzhen exchanges. RMB denominated. Off-limits to foreigners, except for Qualified Foreign Institutional Investors (QFII) who are given a limited quota.
  • B Shares
    • Traded on the Shanghai and Shenzhen exchanges. USD or HKD denominated. Tradeable by foreigners. Illiquid and used by smaller companies.
  • H Shares
    • Traded on the Hong Kong exchange. HKD denominated.
  • Red Chips
    • Traded on the Hong Kong exchange but incorporated outside China. Companies controlled by the Chinese Government.
  • P Chips
    • Traded on the Hong Kong exchange but incorporated outside China. Companies run by private sector businessmen.

Main Indices

  • FTSE China A50 Index – Largest 50 A Share companies.
  • FTSE China 25 Index – Largest 25 Chinese stocks listed on a Hong Kong exchange.
  • SSE Composite Index – Index of all stocks traded on the Shanghai exchange.
  • CSI 300 Index – Top 300 A-Share stocks traded on the Shanghai and Shenzhen stock exchanges.
  • MSCI China Index – Top 85% of equities in the H Shares, B Shares, Red Chips, P Chips categories (no A Shares).

U.S. ETFs

  • iShares FTSE China 25 Index ETF (FXI)
    • Tracks FTSE China 25 Index
    • Average daily volume ~20M
  • iShares MSCI China Index Fund (MCHI)
    • Tracks MSCI China Index
    • Average daily volume ~500K
  • SPDR S&P China ETF (GXC)
    • More diversified than FXI
    • Average daily volume ~200K
  • Morgan Stanley China A Share Fund (CAF)
    • Tracks MSCI China A Index and a China Blended Index (80% of MSCI China A Index and 20% of MSCI China Index)
    • Average daily volume ~180K
  • PowerShares Golden Dragon China Portfolio ETF (PGJ)
    • More tech and consumer companies
    • Average daily volume ~70K
  • Guggenhiem China Small Cap ETF (HAO)
    • Tracks AlphaShares China Small Cap Index
    • Average daily volume ~100K

U.S. Leveraged ETFs

  • ProShares Ultra FTSE China 25 (XPP)
  • ProShares UltraShort FTSE China 25 (FXP)
  • Direxion Daily China Bull 3x ETF (YINN)
  • Direxion Daily China Bear 3x ETF (YANG)

Hong Kong ETFs

  • iShares FTSE China A50 Index ETF (HK:2823)
    • Synthetic ETF, using China A-Share Access Products (CAAPs)
    • Average daily volume ~130K
  • CSOP FTSE China A50 ETF (HK:2822)
    • Directly invests in A-Shares via RMB Qualified Foreign Institutional Investor (RQFII) quotas
    • Average daily volume ~50K
  • ChinaAMC CSI 300 Index ETF (HK:83188)
    • Directly invests in A-shares via RQFII
    • Average daily volume ~8.8M
  • DBX CSI 300 Index Fund (HK:3049)
    • Seems to be a synthetic ETF
    • Average daily volume ~4.4M

Singapore Futures

  • FTSE China A50 Index Futures, traded on the Singapore exchange
  • Contract size: US$1 * FTSE China A50 Index Value
  • Minimum fluctuation: 5 index points (US$5)

-END-

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