To The Moon

In the second half of 2025, interest in China assets has been heating up rapidly. Southbound capital inflows hit new records for consecutive days, while turnover in ETFs like the Hang Seng China Enterprises Index (HSCEI) ETF and the Hang Seng Tech ETF repeatedly set fresh highs. The Hong Kong market, once sluggish, has re-emerged on the “must-have” list for global capital. At the same time, the renminbi has stabilized after a wave of depreciation expectations, helping to restore investor confidence in cross-border allocation.

From a valuation perspective, both A-shares and Hong Kong stocks are trading at historical lows. The CSI 300’s PE ratio is around 12x, the Hang Seng Index’s PB ratio has even slipped below 1x, while in contrast, the S&P 500’s PE is as high as 29x and PB above 3x. The gap is so wide that China assets are now seen as the “cheapest core market in the world.”

For this reason, both international hedge funds and local high-net-worth investors are reassessing the strategic value of China assets. For ordinary investors, what’s needed now is a clear “formula” for building a cross-border portfolio—one that lets you benefit from valuation lows without falling into the trap of chasing rallies or panicking during dips.

In short, this is a window of opportunity you can’t miss: money is moving, valuations are low, policy is supportive, and the market puzzle pieces are already on the table—it’s up to you to put them together.

I. Why Cross-Border Allocation Matters: Diversify Risk + Enhance Returns

Now that we know China assets are in a “valuation sweet spot,” the natural question is: should you just buy A-shares or just buy Hong Kong stocks? The answer is no. Investing in a single market is like walking with one leg—you might move forward, but you’ll stumble easily.

• Only A-shares? You’ll get hit whenever domestic data disappoints or policies tighten.

• Only U.S. stocks? Sure, they’re global leaders, but they’re still vulnerable to Fed rate hikes and stretched tech valuations.

• Only Hong Kong stocks? They’re cheap, but liquidity and sentiment swings can make them spike and crash quickly.

That’s why cross-border allocation is essential. The benefits come in two main forms:

1. Diversification: Different markets perform differently across cycles. In 2022, when U.S. tech stocks plunged, Hong Kong’s resource and SOE stocks held up thanks to policy support. In 2023, while A-shares corrected, the S&P 500 and Hang Seng Tech both rebounded. Combine all three, and you’ve got a built-in “auto-balancer” that cushions against one-sided drawdowns.

2. Return Enhancement: Cross-border allocation expands your opportunity set. A-shares give you consumer and new energy plays; Hong Kong offers undervalued financials and tech; U.S. markets give you access to strategic sectors like rare earths and semiconductors. When markets rotate, there’s always a part of your portfolio pulling its weight.

📌 Beginner’s Analogy: Think of investing like carrying eggs. Put them all in one basket (say, only A-shares), and if you drop it, they all break. Spread them across three baskets (A-shares, Hong Kong, and U.S.), and even if one falls, the other two protect you.

II. The Ultimate China Asset Formula: An ETF Mix-and-Match Menu

For many beginner investors, the hardest question is: there are so many ETFs—how do I combine them? Don’t worry, think of cross-border allocation like ordering dishes off a menu. Here’s your “ultimate formula menu.”

1. A-shares: The “Ballast” of Your Portfolio

A-shares are like plain rice—simple, reliable, but always the staple.

• Broad-based ETFs (CSI 300, SSE 50): Cover finance, real estate, energy, and consumer sectors. Ideal as your core holdings.

  • Examples: CSI 300 ETF ( $HUATAI-PINEBRIDGE CSI 300 INDEX TRADING SECURITIES INVESTMENT FUND(510300)$ .SH, $JIASHI CSI 300 INDEX TRADING SECURITIES INVESTMENT FUND(159919)$ .SZ), SSE 50 ETF ( $SSE 50 ETF FUND(510050)$ .SH).

• Defensive/Counter-cyclical ETFs (Consumer, Healthcare): Provide stability when the broader market drops.

  • Examples: CSI Consumer ETF ( $CSI IN THE MAIN CONSUMER EXCHANGE-TRADED INDEX SECURITIES INVESTMENT FUND(159928)$ .SZ), Healthcare ETF ( $GF MEDICINE AND HEALTH CARE ALL TRANSACTIONAL OPEN INDEX OF SECURITIES INVESTMENT FUNDS(159938)$ .SZ).

• Growth ETFs (New Energy, Semiconductors): Capture industrial upgrading trends—volatile but with strong long-term potential.

  • Examples: EV ETF ( $CATHAY PACIFIC CHINA SECURITIES NEW ENERGY VEHICLE TRADING OPEN INDEX SECURITIES INVESTMENT FUND(159806)$ .SZ), Solar ETF ( $HUATAI BAIRUI CHINA SECURITIES PHOTOVOLTAIC INDUSTRY TRADING OPEN INDEX SECURITIES INVESTMENT FUND(515790)$ .SH), Semiconductor ETF ( $GUOLIAN AN CHINA STOCK EXCHANGE REFERS TO SEMICONDUCTOR PRODUCTS AND EQUIPMENT TRADING OPEN-ENDED INDEX SECURITIES INVESTMENT FUND(512480)$ .SH).

Suggested Allocation: 30–40% in broad-based ETFs, 10–15% in defensive ETFs, 10–15% in growth ETFs.

2. Hong Kong Stocks: The “Value Buffet”

Hong Kong stocks are like the “value meal” on the menu—cheap and filling.

• HSCEI ETF ( $HSCEI ETF(02828)$ .HK): Packed with Chinese banks, insurers, and energy firms, trading at about half the valuation of U.S. peers.

• Hang Seng Tech ETF ( $CSOP HS TECH(03033)$ .HK): Includes Alibaba, Tencent, Meituan, Xiaomi. High volatility, but explosive upside when sentiment turns.

• High Dividend ETFs: Often yield above 5%, great for “sit back and collect rent” investors.

  • Examples: Hang Seng High Dividend Yield ETF , CSOP China Dividend ETF .

Suggested Allocation: 15–20% in HSCEI, 10% in Hang Seng Tech, 5–10% in High Dividend ETFs.

3. U.S. Stocks: The “Seasoning” of Global Allocation

U.S. ETFs are like spices—used in moderation, they bring out the flavor.

• China-focused ETFs ( $KraneShares CSI China Internet ETF(KWEB)$ , $iShares China Large-Cap ETF(FXI)$ ): Buy China companies via U.S. markets, with high liquidity.

• Resources/Commodities ETFs ( $VanEck Rare Earth and Strategic Metals ETF(REMX)$ ): Exposure to rare earths and strategic metals, hedges against inflation.

• Defensive ETFs ( $Vanguard Total Bond Market ETF(BND)$ ): U.S. bond ETFs act as safe havens when markets get stormy.

Suggested Allocation: 15–20% total U.S. exposure: ~10% in KWEB, 5–10% in BND.

III. Key Tips for Allocating China Assets

Building your portfolio isn’t a “set and forget” exercise. Especially with China assets, here are a few practical tips to avoid common pitfalls:

1. Don’t Go All-In Just Because It’s Cheap A-shares and Hong Kong stocks often look dirt-cheap, but cheap doesn’t mean they can’t get cheaper. Safer play: buy in batches.

2. Watch the FX Rates Cross-border investing means juggling RMB, USD, and HKD. Currency swings can eat into your gains. Simple hack: use multi-currency ETFs to spread risk.

3. Mind Taxes and Fees U.S. dividends face withholding tax, Hong Kong trades carry stamp duty, A-shares charge subscription/redemption fees. Small in one trade, big over years. Solution: pick low-cost, large-scale ETFs.

4. Rebalance Regularly Portfolios are like plants—you can’t just water them and walk away. Check quarterly: if Hong Kong outgrows its target, trim and shift into A-shares or U.S. bonds. That’s rebalancing in action.

Bottom line: Allocating China assets isn’t about “buy and forget.” It’s about scaling in slowly, watching FX, managing costs, and pruning your portfolio regularly. That’s how you stay steady and avoid pitfalls.

IV.Invest in China with Tiger—your one-stop solution

Bullish on China but not sure how to allocate? With one Tiger account, you can invest in a range of China-related assets:

A-shares Connect: $HUATAI-PINEBRIDGE CSI 300 INDEX TRADING SECURITIES INVESTMENT FUND(510300)$ ; $CARD IN 500 EXCHANGE-TRADED INDEX SECURITIES INVESTMENT FUND(510500)$ ; $E-FUND GEM TYPE OPEN INDEX TRADING SECURITIES INVESTMENT FUND(159915)$ $Contemporary Amperex Technology Co.,Ltd.(300750)$ ; $Kweichow Moutai Co.,Ltd.(600519)$

Hong Kong Market: $Xinjiang Tianshun Supply Chain Co.,Ltd.(002800)$ $HSCEI ETF(02828)$ $CAM MSCI A50(02839)$ ; $TENCENT(00700)$ , $MEITUAN-W(03690)$ , $CHINA MOBILE(00941)$

US Markets: $Xtrackers Harvest CSI 300 China A-Shares ETF(ASHR)$ , $KraneShares CSI China Internet ETF(KWEB)$ , $iShares China Large-Cap ETF(FXI)$ , $Alibaba(BABA)$ , $BIDU-SW(09888)$ $PDD Holdings Inc(PDD)$

In addition, Tiger Trade’s signature features—TigerAI and Recurring Investment—make it easier to build exposure to Chinese assets:

• TigerAI Investment Assistant: New to Chinese assets? Ask anytime—e.g., “Which ETFs track the CSI 300?” or “Which China ADRs are trending lately?”—and get answers instantly.

• Recurring Investments for HK stocks & ETFs: Worried about timing? Tiger Trade supports daily/weekly/monthly recurring plans for Hong Kong stocks and ETFs to average your cost, build long-term positions, and pursue steadier outcomes.

Disclaimer: This article provides market insights and investment ideas, not financial advice. Investing carries risks—please invest prudently.