Investors React To China Stock Crash: A Look At 3 Volatile Chinese ETFs

Things have gone from bad to worse in China today, as the market continues to tumble despite the efforts of government regulators. The country’s new regulatory move places a six month ban on investors owning stakes of more than 5% of a company from selling any of their shares. The move was intended to stop some of the market’s bleeding, but the Shanghai Composite Index is down nearly 6% on the day.

China was having a fantastic year up until a few weeks ago, and the country was even leading the worldwide markets at some points in 2015. June came and wiped away all that growth, with the market dropping 30% overall and companies losing a total of $3 trillion in value. The collapse has been so bad that many Chinese companies are opting to halt trading entirely.

The easiest way to illustrate the magnitude of what is happening in China is to take a look at some of the country’s popular ETFs. The social media world was buzzing about several Chinese ETFs today, and we’ve highlighted some of our favorite comments and reports, hopefully giving you a better understanding of today’s sell-off.

ETFs having a rough day

As one could expect, ETFs tracking China’s main indexes saw big losses across the board today. The first one to look at is the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR - ETF report). ASHR tracks the CSI 300 index, which is comprised of the 300 largest and most liquid stocks in China’s A-share market, which are typically China-based companies traded by mainland Chinese citizens.

Here we see the extreme measures being used in an attempt to stop this sell-off, as this investor reports that 40% of the market has halted trading.

One of today’s biggest losers is the Daily FTSE China Bull 3x Shares ETF (YINNETF report), which is a leveraged ETF that seeks daily investment returns of 300% of the performance of China’s FTSE 25 Index. While the CSI 300 tracks the A-share market, the FTSE 25 follows the 25 largest and most liquid companies on the Hong Kong Stock Exchange. YINN is down about 14% on the day, and investors weren’t happy about it. 

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