This is a passive ETF that tracks the FTSE China Index and holds large- and mid-cap Chinese stocks across the market on a market-cap-weighted basis. It offers broad exposure to leading Chinese companies such as Tencent and Alibaba.

It suits long-term investors who want low-cost diversification across the Chinese stock market as a whole.

It is a passively managed (index-tracking) ETF run by Franklin Templeton.

The fund holds the constituents of the FTSE China Index at their market-cap weights, tracking the performance of large- and mid-cap Chinese stocks as a whole. It broadly covers Chinese companies listed on the mainland, in Hong Kong and overseas, and rebalancing is applied quarterly in accordance with index rules.

• Management fee below the category average
• Broad diversification across Chinese large- and mid-cap stocks

Assets under management (AUM) stand at $253.6M, and the expense ratio is 0.19% per year.

Its fee level, lower than that of comparable China ETFs, is a strength, while trading liquidity is better in larger peer ETFs.

The fund moves in line with the Chinese stock market, so it tends to be highly volatile depending on the policy and regulatory environment and on macroeconomic conditions. Short-term returns have tended to react sensitively to China's economic cycle and to global risk appetite.

Fund flows tend to be volatile depending on investor sentiment toward the Chinese market. Short-term flows can reverse quickly on policy expectations or regulatory concerns.

Its strengths are a low management fee and broad exposure to China, while policy and regulatory risk and currency fluctuations are the main drawbacks.

The two ETFs shown in the table, MCHI and FXI, are comparable funds with exposure to the same Chinese stocks. The former focuses on broad large- and mid-cap stocks, while the latter centers on large caps. EWT, EWZ and INDA offer exposure to other emerging markets such as Taiwan, Brazil and India, so they are not direct substitutes. You may also consider ASHR, which concentrates on mainland A-shares, and KWEB, which targets the Chinese internet theme. For leveraged or inverse exposure, YINN (bullish) and YANG (bearish) are also options.

Here are the points to review before investing in FLCH. It is a core ETF that offers low-cost exposure to the Chinese market as a whole, but policy and regulatory risk, currency exposure and trading liquidity should be checked before you buy.

Changes in Chinese policy and regulation and currency fluctuations are the main drivers of short-term volatility. Because short-term losses can be significant when market sentiment shifts, you should size your position to match your risk tolerance.

It is a suitable choice for long-term investors who want low-cost diversification across the Chinese market as a whole. If cost matters most, FLCH fits; if broad liquidity matters more, a larger peer ETF is the better fit.