Two exchange-traded funds seek profits in China with two different strategies.
While the Rayliant Quantamental China Equity ETF dives into specific regions, the recently launched Roundhill China Dragons ETF buys the country’s biggest stocks.
“[It’s] “We only focused on nine companies, and these companies are the companies that we identified as having similar characteristics in terms of scale in the United States,” Dave Mazza, CEO of Roundhill Investments, told ETF Edge ” from CNBC this week.
Since its inception on October 3, the Roundhill China Dragon ETF is down almost 5% as of Friday’s close.
Meanwhile, Jason Hsu of Rayliant Global Advisors is behind the hyper-local Rayliant Quantamental China Equity ETF. It has existed since 2020.
“These are local stocks, local names that you would have to be a local Chinese to buy easily,” the company’s president and chief investment officer told CNBC. “It paints a very different picture because China is sort of in a different place on its growth curve.”
Hsu wants to provide access to names that are less familiar to U.S. investors, but that can generate big gains, comparable to those of recent big tech stocks.
“Technology is important, but many of the fastest growing stocks are actually companies that sell water. [and] people who run restaurant chains. So, they often have higher growth than most tech names,” he said. “There is very little research, at least outside of China, and they may represent what is more of a current business theme in China. “
As of Friday’s close, the Rayliant Quantamental China Equity ETF was up more than 24% so far this year.
