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

These two ETFs give a general sense of what the market looks like in China overall. We get a perspective of how the Chinese are trading, and a bit of a broader, more global outlook on how China’s biggest stocks are performing. Investors may want to play it safe and avoid these ETFs right now, but a bounce back could possibly be in order soon, and we should all keep a close eye on them going forward.

 Inverse ETFs win big

Chances are if you bet on China continuing to slip, you won big. The simplest way to win big on China’s crumbling market is to time an investment in an inverse ETF perfectly. One noteworthy example of one of these ETFs is the Direxion Daily CSI 300 China A Share Bear 1x Shares ETF (CHAD - ETF report). Again, this ETF tracks the A-share market, and its leveraged and inverse status has made it a big winner as the A-share market has fallen. It is up over 10% today. 

CHAD is relatively new and was created just before the worst of China’s recent woes. This perfect timing has made it a huge success. Another inverse ETF doing well is the Daily FTSE China Bear 3x Shares (YANG - ETF report). As Chinese philosophy says, with every yin there is a yang, and this ETF follows the inverse of the FTSE 25, leveraged 300% like YINN as well. 

YANG has climbed even higher, and currently sits up over 16% on the day. 

Bottom Line

From our perspective, sometimes it can be hard to understand exactly what is going on in foreign markets. However, when a collapse like this happens, it starts to have an effect on American markets, so it is extremely important to stay informed about China right now. As we’ve showed here, one of the easiest ways to do that is looking at Chinese ETFs, and even though the country’s market is somewhat unpredictable at the moment, investors can see the possible plays to make and especially if the downturn continues.

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