Two exchange-traded funds are focusing on profiting from the Chinese market using different strategies. The Roundhill China Dragons ETF, which was recently launched, invests in the country’s largest stocks, specifically targeting nine companies that have similar characteristics to major U.S. companies. In contrast, the Rayliant Quantamental China Equity ETF, managed by Jason Hsu of Rayliant Global Advisors, focuses on specific regions within China and invests in local companies that may be less familiar to U.S. investors but can offer significant growth potential.
The Roundhill China Dragons ETF, led by CEO Dave Mazza, has experienced a 5% decline since its inception on October 3. This ETF focuses on investing in China’s biggest companies to capitalize on their growth potential and market performance. In comparison, the Rayliant Quantamental China Equity ETF, in operation since 2020, is up over 24% year-to-date as of the latest market close. This ETF seeks to provide access to local Chinese companies that may offer substantial growth opportunities, including those in industries such as water distribution and restaurant chains, which may have higher growth potential than traditional technology companies.
Jason Hsu, chairman, and chief investment officer of Rayliant Global Advisors, emphasizes the importance of investing in local Chinese companies to capture growth opportunities that may not be well-known outside of China. He highlights that while technology is significant, other sectors such as water distribution and restaurant chains can provide higher growth rates than tech companies. These lesser-known companies may offer thematic investment opportunities that are unique to the Chinese market and have the potential for significant gains similar to those seen in big tech stocks.
The Rayliant Quantamental China Equity ETF provides exposure to local Chinese companies that are typically only accessible to local investors. These companies represent a different stage in their growth cycle compared to more established U.S. companies, offering an opportunity for investors to diversify their portfolios and potentially achieve high returns. By investing in a mix of companies from various industries within China, this ETF aims to capitalize on the country’s economic growth and emerging market opportunities.
Both the Roundhill China Dragons ETF and the Rayliant Quantamental China Equity ETF offer investors exposure to the Chinese market, with each fund utilizing a different investment strategy. While the Roundhill ETF focuses on larger Chinese companies with similarities to major U.S. firms, the Rayliant ETF targets local Chinese companies that may offer unique growth opportunities not commonly seen in other markets. By diversifying their investments across various sectors and regions within China, investors have the potential to benefit from the country’s economic growth and emerging market opportunities.
