SSE Index ETFs for China Stock Market Exposure

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Posted Jan 10, 2025

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Detailed view of bicycle gear and chain with Shimano SIS Index system.
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If you're looking to gain exposure to the China stock market, SSE Index ETFs are a great option. They track the Shanghai Stock Exchange Composite Index, which covers over 800 large-cap and mid-cap stocks.

SSE Index ETFs offer a convenient way to invest in Chinese equities, with some funds offering a low minimum investment requirement. The SSE Index is a market-capitalization-weighted index, meaning that larger companies have a greater influence on the overall performance of the fund.

For example, the SSE 180 Index, which is a subset of the SSE Index, tracks the top 180 stocks on the Shanghai Stock Exchange.

What Is the Index?

The Shanghai Composite Index, also known as the SSE index, is the major benchmark for listed Chinese equities. It was launched in 1991 and follows all the class A and class B shares listed on the Shanghai Stock Exchange.

It's a broad-based index that includes 1,549 shares drawn from ten major sectors, with financials having the biggest weighting within the index. The index is a good way to invest in China.

Credit: youtube.com, NYSE Whats the Fund KraneShares SSE STAR Market 50 Index ETF Chief Investment Officer, Brendan Ahern

Among its many stocks are Kweichow Moutai Co., PetroChina, Industrial and Commercial Bank, Agriculture Bank of China, Bank of China, and China Merchants Bank. Foreign investors generally do not have direct access to investing in it due to tight controls by Chinese authorities.

However, they can turn to exchange traded funds (ETFs) to invest in Chinese stocks. The DWS Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) is one of the most popular ways to do so.

This fund allows U.S. investors to invest in China Class A shares listed on Shenzhen and Shanghai exchanges through a partnership with Deutsche Bank and Harvest Global. Its investment objective is to seek results that correspond to the performance of the China Securities 300 Index (CSI 300 Index).

China's Stock Market

The Shanghai Stock Exchange is a significant player in the global market, ranking as the third-largest stock exchange in the world after the New York Stock Exchange and the Nasdaq in terms of market capitalization.

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To invest in the Shanghai Stock Exchange, you can purchase American depository receipts (ADRs), invest in mutual funds or exchange traded funds (ETFs) that have exposure to the exchange, as well as invest with market makers that can access the exchange.

The Shanghai Composite Index is one of the most often-cited indices to measure the economic health of China, but foreign investors generally do not have direct access to investing in it because of tight controls by Chinese authorities.

One of the most popular ways to invest in Chinese stocks is through the DWS Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), which allows U.S. investors to invest in China Class A shares listed on Shenzhen and Shanghai exchanges.

The fund's investment objective is to seek results that correspond to the performance of the China Securities 300 Index (CSI 300 Index), which focuses on the top 300 stocks of the Shanghai Stock Exchange, including well-known companies like Kweichow Moutai Co. and PetroChina.

Investing and Trading

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You can trade the SSE with CFDs and Spread Betting, which allows you to take a view or position on the index and its constituents.

Most CFD brokers and Spread Betting firms don't directly offer CFDs or Spread bets on the Shanghai Composite Index itself, but they do offer CFDs and Spread bets over other Chinese equity indices and instruments that track Chinese equities.

You should be aware that when trading CFDs or Spread Bets, you're never the owner of the underlying, but rather speculating on the performance of the instrument's price on a leveraged or geared basis.

Trading CFDs or Spread Bets is treated differently by tax authorities, with Spread Betting profits being exempt from UK capital gains taxes for individual UK taxpayers, but not corporations or those who pay tax abroad.

To buy shares on the Shanghai Stock Exchange, you can purchase American depository receipts (ADRs), invest in mutual funds or exchange traded funds (ETFs) that have exposure to the exchange, or invest with market makers that can access the exchange.

How to Invest or Trade

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To invest or trade, you can choose from several options. You can trade Chinese Shanghai Stock Exchange Indexes with brokers authorized and regulated by the FCA.

To purchase shares on the Shanghai Stock Exchange, you can buy American depository receipts (ADRs).

Investing in mutual funds or exchange traded funds (ETFs) that have exposure to the exchange is another option. These funds can provide a way to access the exchange without directly trading on it.

You can also invest with market makers that can access the exchange.

Buying Shanghai Stock

You can buy shares on the Shanghai Stock Exchange through various channels. One way is to purchase American depository receipts (ADRs), which allow foreign investors to access Chinese stocks.

To invest in Chinese stocks, consider using mutual funds or exchange traded funds (ETFs) that have exposure to the Shanghai Stock Exchange. The DWS Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) is a popular option that tracks the performance of the top 300 stocks on the Shanghai Stock Exchange.

Credit: youtube.com, How to Invest In Chinese Stock Markets (And Why You Absolutely Should Not!) | Economics Explained

Market makers can also provide access to the Shanghai Stock Exchange, allowing you to invest in Chinese stocks. This option is mentioned as a way to buy Shanghai stock in the article.

The Shanghai Stock Exchange is the biggest stock exchange in mainland China, listing major stocks like PetroChina, Industrial and Commercial Bank, and China Merchants Bank.

Trading with CFDs and Spread Betting

Trading with CFDs and Spread Betting is a great way to take a view or position on the Shanghai Composite Index and its constituents.

Most CFD brokers and Spread Betting firms don't make a specific market in the Shanghai Composite Index itself, but they do offer CFDs and Spread bets over other Chinese equity indices.

You'll be speculating on the performance of the instrument's price, and you'll be doing so on a leveraged or geared basis, which means your CFD broker or Spread Betting provider gears up the money on your trading account.

Credit: youtube.com, Spread Betting vs CFD Trading: Key Differences ☝️

CFDs are classified as trades, while Spread Bets are treated as bets, which has different tax treatment implications.

Profits made from Spread Betting are exempt from UK capital gains taxes, but this privilege only extends to individual UK taxpayers and not to corporations or those individuals who pay tax abroad.

Performance History

The SSE Index ETF has a performance history that's worth taking a closer look at.

Its 1-month performance was -3.74% in terms of Fund NAV, slightly worse than the -2.72% decline of the underlying index.

Over the past 3 months, the Fund NAV has seen a 3.55% gain, outperforming the underlying index's 9.00% increase.

The 6-month performance was a notable 31.04% gain for the Fund NAV, ahead of the underlying index's 38.61% increase.

Year-to-date, the Fund NAV has a 6.40% return, matching the underlying index's performance.

Here's a breakdown of the performance data:

TimeframeFund NAVClosing PriceUnderlying Index
1 Month-3.74%-4.82%-2.72%
3 Month3.55%2.92%9.00%
6 Month31.04%29.91%38.61%
YTD6.40%6.11%13.56%
Since Inception-47.48%-47.88%-39.42%

The investment return and principal value of an investment will fluctuate, so past performance is not a guarantee of future results.

Premium and Discount

Credit: youtube.com, ETF at Premium or Discount?

The Premium and Discount section of an SSE Index ETF's performance report is an important aspect to understand.

The data shows that the fund has spent a significant amount of time trading at a discount, with 173 days in 2024 and 8 days in Q1 2025.

In contrast, the fund has only traded at a premium for a short period, with 72 days in 2024.

The fund has not traded at NAV for any days in 2024 or Q1 2025.

Here's a breakdown of the premium and discount days:

Time PeriodDays Traded at PremiumDays Traded at NAVDays Traded at Discount
2024 Full Year720173
Q1 2025008

Holdings and Brokers

The SSE Index ETF offers a range of top holdings, with Cambricon Technologies-A taking the lead at 11.79% of net assets.

The top 10 holdings in the SSE Index ETF are dominated by Chinese companies, with Cambricon Technologies-A holding the largest share.

Here are the top 10 holdings in the SSE Index ETF:

RankName% of Net AssetsTickerIdentifierShares HeldMarket Value($)
1CAMBRICON TECHNOLOGIES-A11.79%688256CNE1000041R844,8254,247,298
2HYGON INFORMAT-A11.11%688041BMZNGH6199,6584,001,315
3MONTAGE TECHNO-A6.14%688008CNE100003MN7245,3572,211,386
4BEIJING KINGSO-A5.16%688111CNE100003PM249,6621,858,691
5ADVANCED MICRO-A4.72%688012CNE100003MM966,9621,699,258
6SHANGHAI UNITE-A4.11%688271BN47MR888,4931,481,911
7SHENZHEN TRANS-A3.34%688036CNE100003P7497,9551,204,400
8BEIJING ROBORO-A2.69%688169CNE100003R8031,734967,919
9NATIONAL SILIC-A2.54%688126CNE1000040F5353,968914,196
10SUPCON TECHNOLOGY CO-A2.46%688777CNE100005D92135,823885,577

Top 10 Holdings

Let's take a closer look at the Top 10 Holdings of a particular fund. According to the provided data, CAMBRICON TECHNOLOGIES-A takes the top spot with a 11.79% share of the net assets, making it a significant holding.

Credit: youtube.com, Top 10 Broker Holding and their accumulation and distribution scipts

The second-largest holding is HYGON INFORMAT-A, which accounts for 11.11% of the net assets. This is a notable position, and it's interesting to see how it stacks up against the other holdings.

The fund also has a substantial holding in MONTAGE TECHNO-A, which accounts for 6.14% of the net assets. This is a significant chunk of the overall portfolio.

Here's a breakdown of the Top 10 Holdings:

RankName% of Net AssetsTickerShares HeldMarket Value($)
1CAMBRICON TECHNOLOGIES-A11.79%68825644,8254,247,298
2HYGON INFORMAT-A11.11%688041199,6584,001,315
3MONTAGE TECHNO-A6.14%688008245,3572,211,386
4BEIJING KINGSO-A5.16%68811149,6621,858,691
5ADVANCED MICRO-A4.72%68801266,9621,699,258
6SHANGHAI UNITE-A4.11%68827188,4931,481,911
7SHENZHEN TRANS-A3.34%68803697,9551,204,400
8BEIJING ROBORO-A2.69%68816931,734967,919
9NATIONAL SILIC-A2.54%688126353,968914,196
10SUPCON TECHNOLOGY CO-A2.46%688777135,823885,577

These holdings give us a glimpse into the fund's investment strategy and the types of companies it's backing.

Compare Best Trading Brokers

If you're looking to trade the SSE Composite Index, you'll want to compare the best brokers for the job.

To do this, you can view our comparison tables for investment providers and trading platforms.

All brokers listed are authorised and regulated by the FCA.

You can trade Chinese Shanghai Stock Exchange Indexes, including the SSE 180, SSE 50, and SSE Mega-Cap Indexes, with these top brokers.

Frequently Asked Questions

How to invest in SSE Composite Index?

To invest in the SSE Composite Index, you can buy shares through ADRs, mutual funds, ETFs, or work with market makers who have access to the Shanghai Stock Exchange. Investing in the SSE Composite Index offers a unique opportunity to tap into China's growing economy.

What is the outlook for the SSE index?

The Shanghai Composite Stock Market Index is expected to trade around 3336.51 points by the end of the quarter and 3241.18 in 12 months time, according to Trading Economics' models and analyst forecasts.

Which ETF tracks CSI 300 China?

The Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) tracks the CSI 300 Index, which represents the largest and most liquid Chinese A-shares. This ETF provides investors with exposure to the Chinese equity market.

Krystal Bogisich

Krystal Bogisich

Lead Writer

Krystal Bogisich is a seasoned writer with a passion for crafting informative and engaging content. With a keen eye for detail and a knack for storytelling, she has established herself as a versatile writer capable of tackling a wide range of topics. Her expertise spans multiple industries, including finance, where she has developed a particular interest in actuarial careers.

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