Both exchange-traded funds seek profits in China with two different strategies.
In the meantime Rayliant Quantamental China Equity ETF dives into specific regions, newly launched Roundhill China Dragons ETF buys the largest stocks in the country.
“(It’s only focused on nine companies, and these companies are companies that we’ve identified as having similar characteristics of magnitude in the U.S.,” Roundhill Investments CEO Dave Mazza told CNBC.)ETF Edge“this week.
Since its inception on Oct. 3, the Roundhill China Dragon ETF is down nearly 5% at Friday’s close.
Meanwhile, Rayliant Global Advisors’ Jason Hsu is behind the hyper-local Rayliant Quantamental China Equity ETF. It has been around since 2020.
“These are local stocks, you would have to be a local Chinese to buy local names easily,” the company’s chairman and chief investment officer told CNBC. “It paints a very different picture because China is a different part of its growth curve.”
Hsu wants to give U.S. investors access to names that are less familiar, but can deliver huge returns on par with the latest Big Tech stocks.
“Tech is important, but a lot of the higher-growth stocks are people who run restaurant chains (and) sell water. So they often have more growth than a lot of the tech names,” he said. “There is very little research, at least outside of China, and it may represent more than just the current issue of intra-China trade.”
As of Friday’s close, the Rayliant Quantamental China Equity ETF is up more than 24% this year.
