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What are your thoughts on China ETFs listed on SGX?

Stumbled across an article (https://www.sgx.com/research-education/market-u...) on a few China ETFs, listed on the SGX. Interests me because some are denominated in SGD (ticker symbols TID and JK8). Was wondering if this means less currency risks as compared to those denominated in USD and HKD, and if I should at all be interested in these ETFs? Cheers!

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The good part is, because the ETF is traded in SGD, you do not have to worry about converting SGD to another currency to buy the ETF, and then covert it back to SGD once you sell it. So there's some convenience there.

But, you are still exposed to FX risk either way because the underlying stock holdings of the 2 ETFs are mostly in USD/HKD/CNY (i.e. not SGD). And it boils down to how the ETF provider manages the foreign currency exposure against the SGD-based ETF.

DB if i'm not mistaken, used to perfectly hedge it's underlying equity exposure, to eliminate currency fluctuations of the underlying equities versus the ETF's base currency, but this will entail hedging costs from the buy/sell of FX derivatives, and it will be reflected in the ETF's NAV. You won't exactly see it, but it's all wrapped up in the performance of the ETF.

UOB on the other hand, does not hedge the underlying currency exposure at all (at least that's what i read from the ETF prospectus), so the performance of that ETF will be directly impacted by currency fluctuations of the underlying against SGD.

So, the FX risk will still be there, they are just packaged differently. If it's a possibility, buy the HKD/USD ETF, and draw a HKD/USD loan to fully finance the purchase, that creates a natural currency hedge on the investment. Of course, this will become a levered investment.

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