Most investors assume that the more liquid the ETF, the easier and cheaper it is to trade. This is true in markets like the US, where on-screen liquidity is prevalent, but Asia markets are not as straightforward. China A ETFs with on-screen liquidity are easy to trade, but easier does not always mean cheaper to trade. There is market risk in trading on-screen and though it is easier, it can actually be more expensive than trading via the underling liquidity of China A stocks inside the ETF.

May 16, 2019