China spent 2025 as the trade that finally worked, roaring almost 40% higher after years of disappointment. Then 2026 arrived and handed some of it back, with the market down high single digits so far this year. That round trip is the whole story of investing in China: it moves in violent bursts, in both directions, and the discount is always there to tempt you back. So the question worth asking is not “is China cheap” (it is), but “does a slice of it belong in your portfolio, and if so, how do you buy it?”
The case for
Chinese equities are cheap, and have been for years. The market trades at a large discount to developed markets on almost any measure you pick, and after a red 2026 it is cheaper than it was in January. If you believe earnings eventually follow economies, you are buying the world’s second-largest economy at a fraction of what you pay for the US. Cheap is the reason value investors keep coming back to China even after being burned.
The case against
China Shanghai Composite Stock Market Index
But there is also a case against. China is not a normal market. The state can and does reach into industries overnight, as anyone who held the education or property sectors a few years ago will tell you. Company reporting is harder to trust, the property hangover has not fully cleared, and the relationship with the US remains a real risk that can move prices on a headline. The valuation is partly cheap for a reason, and it has stayed cheap for a long time. You are being paid a discount to carry genuine political and governance risk that you simply do not carry when you own the S&P 500. This year’s drop, straight after last year’s surge, is a reminder that the discount does not put a floor under anything.
How much China?
Where does that leave you? For most investors China is a satellite, not a core holding. If you own a global tracker like STXWDM or an MSCI World fund, you already have a small amount of China inside it, weighted by the index. Adding a dedicated China position is an active bet that the country will beat the rest of the world from here. That can be a perfectly reasonable position at these valuations, but size it like the concentrated, higher-risk position it is. A few percent of your equity allocation you can live with; 20% is a position that could define your decade for the wrong reasons.
Three ways to buy it on the JSE
JSE Listed China ETFs | July 2026
If you decide you want the exposure, you now have three rand-denominated routes on the JSE, and the difference between them matters.
Two of them are plain index trackers, and they do essentially the same job. The Satrix MSCI China ETF (STXCHN) and the Sygnia Itrix MSCI China Feeder ETF (SYGCN) both track the MSCI China index, giving you the broad Chinese large- and mid-cap market at low cost, with no manager trying to be clever. What you see is what you get: the market’s return, minus a small fee. Because they follow the same index, the sensible way to choose between them is on total expense ratio and on which platform you already use. Do not overthink it, but do compare the TERs, because that small gap compounds over the years you will hold this.
The third route is the newer Prescient China Balanced Feeder (PANDA), listed in March 2026 as South Africa’s first actively managed China ETF. It feeds into an Irish-domiciled UCITS fund, is benchmarked to China CPI plus 3%, and holds a balanced mix rather than pure equity. The idea is that China is exactly the kind of inefficient, state-influenced market where an active manager can add value and dodge the landmines. Maybe. You pay more for that, and you are trusting the manager to earn the higher fee. It is also not a like-for-like swap with the two trackers: a balanced fund will behave differently to a pure equity index, both when China runs and when it falls.
The rand catch
One last thing that catches people every time: all three are rand-denominated but hold foreign assets, so your return has two moving parts. You get the Chinese market’s return in its own currency, plus whatever the rand does against it. A weak rand flatters the number, a strong rand eats into it. That is true of every offshore ETF you own, and China is no exception.
The bottom line
Cheap, volatile, and genuinely risky. If you can buy after a strong year, sit through a weak one, and not check the price every morning, a small and deliberate China position is a defensible call. Just do not confuse either a good year or a bad one for the whole story.
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ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
