Because the prices of U.S.-listed Chinese stocks plunged lately due to China’s crackdown on its tech and education sectors, some of these stocks could be solid bargains now considering their long-term growth potential. So, if one is optimistic about the rebound potential of China ADRs, it could be wise to bet on Chinese stocks-focused ETFs iShares MSCI China ETF (MCHI), KraneShares CSI China Internet ETF (KWEB), iShares Trust - iShares China Large-Cap ETF (FXI), and DBX ETF Trust - Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR). So, read on for a closer evaluation of these funds.U.S.-listed Chinese stocks recently suffered their biggest two-day loss since 2008 due to investors’ pessimism around Beijing’s crackdown on its tech and education sectors. Amid heightened tensions between the world’s two largest economies, China’s cyberspace regulators on July 10 introduced sweeping draft rules for cybersecurity reviews of domestic internet companies that seek overseas listings.
However, these stocks’ price tumble has made many China ADRs solid bargains considering their long-term growth prospects that are based on a thriving domestic economy. The world’s second-largest economy has a booming urban middle-class population and had the highest number of internet users in the first quarter, according to Statista. Furthermore, China’s GDP grew 7.9% in the second quarter, boosted by higher retail sales.
So, for investors that believe China ADRs will rebound soon, we think it could be wise to bet on the following Chinese-equity ETFs: iShares MSCI China ETF (MCHI), KraneShares CSI China Internet ETF (KWEB), iShares Trust - iShares China Large-Cap ETF (FXI), and DBX ETF Trust - Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR).