FLCH vs MCHS

FLCHAFranklin FTSE China ETF

MCHSDMatthews China Discovery Active ETF MCHS

In short

FLCH Cheap and wide, in the best way. FLCH holds roughly a thousand Chinese stocks and charges 0.19% a year, a fraction of what most single-country China funds ask. Whole market, small toll.

MCHS An active China stock picker in a category ruled by index trackers, run by a firm that has focused on Asia since 1991. The trade-offs: a fee at the high end of its peer group and a small, lightly traded footprint.

Stated mandate

FLCH The Fund seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE China RIC Capped Index.

MCHS The fund seeks long-term capital appreciation.

Why people hold it

• FLCH 0.19% a year, against a roughly 0.70% median for China funds. It also undercuts the category stalwarts MCHI and GXC, both at 0.59%.
• About 1,000 holdings, so you own the long tail of Chinese listings rather than a short list of mega-cap headline names.
• One job, done tightly: mirror the FTSE China RIC Capped Index before fees. On tracking it ranks among the strongest builds in its China peer group.sec.gov

• MCHS Most China ETFs just track an index. This one is actively managed, so a person decides what goes in and what stays out.
• Matthews has focused on Asia since 1991, which makes this a specialist shop's China portfolio rather than a generalist's side bet.matthewsasia.com
• The mandate is plain: Chinese stocks, held for long-term capital appreciation. No index weights dictating how much of the portfolio goes to the biggest names.

Worth knowing

• FLCH It is China or nothing. Policy shifts, regulatory news and the currency drive the ride, with no other market in the basket to cushion it.
• Mid-sized and only moderately traded next to the category's giants, so bid-ask spreads can bite more on larger orders.
• Cash comes once or twice a year, not monthly. This is an equity index vehicle, not an income schedule.

• MCHS Cost is the trade-off. 0.89% net of a waiver through April 30, 2027 (0.99% gross), versus 0.19% for FLCH and 0.32% for CXSE, and above the category median fee.
• Small asset base and light trading, so spreads tend to run wider than on the category's household names, and the fund has less scale behind it than long-established rivals.
• Single-country China means one government, one currency and one policy cycle driving results, with no cushion from other markets.

Full FLCH profile⁠

Full MCHS profile⁠