Morningstar Rating

ETF Research and Analysis

by Patricia Oey
IShares China Large-Cap tracks an index composed of the 25 largest Chinese companies listed in Hong Kong and has significant exposure to state-controlled banks and energy firms. These mega-cap state-run companies have benefited   Read more 

Bull Case

FXI invests in some of the largest Chinese companies with substantial economies of scale.
Long-term investors in this fund may benefit from a strengthening Chinese yuan.
China's recently announced reform plan may lay the foundation for stable, albeit slower, growth in the medium term. Read more 

Bear Case

China is transitioning away from capital spending to consumer spending as a driver for growth. There could be some policy and regulation uncertainty in the near term.
The liberalization of interest rates will likely weigh on the margins of the big four banks, which account for about 30% of this fund.
High levels of local government debt, a shadow banking system, and off-balance-sheet bank debt are risks to China's financial system and economy. Read more 

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Lost in Translation: Emerging-Markets Dividend ETFs 
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