FXI vs MCHI

FXIBiShares China Large-Cap ETF

MCHIAiShares MSCI China ETF

In short

FXI The old-guard China trade: since 2004, FXI has held about 50 of the largest Chinese companies listed in Hong Kong, and it is built for heavy, fast trading more than for lowest-cost buy-and-hold.

MCHI The default one-ticker way to own China. MCHI has tracked the MSCI China Index since 2011, holding roughly 600 stocks open to international investors, and it stays actively traded.

Stated mandate

FXI The fund seeks to track an index of large-capitalization Chinese equities traded on the Hong Kong Stock Exchange.

MCHI The fund seeks to track an index of Chinese equities available to international investors.

Why people hold it

• FXI One of the longest-running US-listed China funds, trading since 2004, with two decades of history through China's booms and busts.
• Very actively traded, which is why it is a common vehicle for quick, sizable China positioning rather than a thinly traded niche listing.
• Plain index mechanics: it tracks the FTSE China 50 Index closely, with no leverage or derivative overlays bolted on.ishares.com
• Stands in the upper half of the roughly two dozen US-listed single-country China funds on our overall assessment.

• MCHI One ticker, roughly 600 Chinese stocks. Instead of picking among share classes and listings, you get the MSCI China Index (Net) in a single line item.ishares.com
• 0.59% expense ratio, below the middle of the single-country China pack, and the fund has hewed closely to its stated index mandate.
• Running since 2011 and now a multi-billion-dollar fund that trades actively, which is why it turns up as the reference China holding in so many portfolios.
• One of the stronger implementations in its peer group on tradability and staying power, both scored in the top tier of the China cohort.

Worth knowing

• FXI At 0.73% a year it sits slightly above the China-fund median, and cheaper index alternatives exist, including FLCH at 0.19% and MCHI at 0.59%.
• Concentrated by design: about 50 names, all Hong Kong listings, so mainland-listed A-shares fall outside the mandate.ishares.com
• A single-country equity fund tied to one market, and it distributes once or twice a year rather than monthly.

• MCHI Cheaper broad-China options exist: FLCH charges 0.19% and JPMorgan's active JCHI 0.15%. You are paying up for MCHI's depth and liquidity.
• Single-country equity risk, undiluted. Chinese regulation, currency and policy swings hit the whole basket at once, and the index leans heavily on its biggest names.
• Distributions come once or twice a year, not monthly, so cash flow arrives in lumps.

Full FXI profile⁠

Full MCHI profile⁠