A China ETF can offer many things to a portfolio; namely, upside and diversification stand out. Of course, for many investors, long-term performance appeals the most. One particular China ETF could potentially bring all those factors and more to investor portfolios. At a time when both the U.S. and Japanese stock markets have faced yen carry-trade volatility, China investing could appeal.
See more: The Underrated Equity Segment Dodging Most Yen-Carry-Trade Pain
That strategy is the KraneShares Bosera MSCI China A 50 Connect Index ETF (KBA ). It tracks a subset of firms in the MSCI China A Index. The ETF excludes small-caps, instead focusing on large and midcap China stocks. The strategy takes that approach for a 56 basis point fee.
What has that approach brought to investors? Over the last six months, KBA has outperformed the MSCI ACWI Ex USA Net Total Return ETF, per YCharts. Since launching in March 2014, it has returned 41.39%, per YCharts, also. Together, that helps KBA make an intriguing case for both long-term and near-term performance. Its five-year return of 5% has also helped it outperform both its ETF Database Category and FactSet Segment averages.
Looking ahead, KBA could present an intriguing option. Its focus on key names without a strict sector focus could make it a China strategy to watch. Per ETF Database, KBA weights finance, electronic technology, and produce manufacturing as its top three sectors.
What’s more, China’s government has continued to signal macro policy changes to support the economy. That includes consumer efforts and potentially central bank and monetary actions. For those looking to diversify outside of the United States, KBA could be the China ETF to watch.
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