Want to invest in China? Here are 2 ASX China ETFs to choose from

Here’s why iShares China Large-Cap ETF (ASX: IZZ) and 1 other are my picks for investing in ASX China EFTs today
The post Want to invest in China? Here are 2 ASX China ETFs to choose from appeared first on Motley Fool Australia. –

Investing in China is something of a controversial topic. Over the past couple of years, China’s relationships with both Australia and the United States have unquestionably deteriorated. Both China’s political and economic models of governance remain controversial and as such, many Australians might be feeling uneasy about investing in China directly. Even so, China remains a fertile hunting ground for many investors. It’s one of the fastest-growing economies among the emerging markets of the world, and its unique commercial landscape affords many interesting opportunities. So how does one easily invest in China and Chinese businesses from the comfort of Australia?

Well, I think the best way to do so is through exchange-traded funds (ETFs). Here are 2 ASX China EFTS that investors can choose from today for exposure to the Chinese market.

iShares China Large-Cap ETF (ASX: IZZ)

This ETF from iShares is our first ASX option. It holds 50 of the largest companies listed in mainland China with a simple weighting method based on pure market capitalisation. IZZ’s 5 largest holdings include Meituan Dianping, Tencent Holdings, China Construction Bank, Xiaomi Corp and Ping An Insurance Group.

IZZ charges a management fee of 0.74% per annum, offers a trailing dividend distribution yield of 2.44% and has returned an average of 5.68% over the past 5 years.

VanEck Vectors China New Economy ETF (ASX: CNEW)

This ETF from VanEck is slightly different. It holds 120 companies and focuses on ‘sound companies’ with the ‘best growth prospects’ in the tech, healthcare, consumer staples and consumer discretionary sectors.

CNW’s 5 largest holdings are as follows: Zhejiang Meida, UE Furniture Co, Guandong Biolight, Xiamen Jihong Technology and Shenzhen Kingkey Smart.

This ETF charges a management fee of 0.95% per annum, offers a trailing dividend distribution of 1.15% and has returned an average of 45.98% since its inception in November 2018. While that might look like a ridiculous return, it’s worth noting that the index CNEW tracks has returned a tamer average of 12.76% per annum over the past 5 years.

Foolish takeaway

If I had to choose one of these ASX China EFTS, I would have to go with the latter option – the China New Economy ETF. Although it has a higher management fee at 0.95%, its performance and tilting toward the higher-growth side of the market offset this nicely in my view. While I wouldn’t expect 45%+ returns every year going forward, I think this is a great ETF that would serve investors well in a portfolio today.

These stocks could rocket in a Post-COVID world (FREE STOCK REPORT)

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Want to invest in China? Here are 2 ASX China ETFs to choose from appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!