How to invest in SZSE composite index funds in 2025

It only takes a few minutes to invest in the SZSE composite index. One of the simplest and most popular ways to invest is to buy shares in a Vanguard SZSE composite ETF through an online trading platform.

Where can I invest in the SZSE composite index?

Copy link to section

According to our expert research, IG Markets is the best ETF broker to invest in SZSE composite index funds. 

Both SZSE composite ETFs and SZSE composite CFDs are available to invest in through IG Markets .

Here are three more places to buy the SZSE composite, ranked according to their cost, security, and features.

How do I invest in the SZSE index?

Copy link to section

The easiest way is to sign up to a stock broker, open an investment account, and buy shares in an SZSE composite ETF or CFD. This guide explains how to do it:

Step 1. Sign up to IG Markets

Copy link to section

We recommend using IG Markets to invest in SZSE composite. Sign up for a brokerage account and deposit some money. You may need to supply a form of photo ID to verify the account.

4.4

IG Markets

Min. Deposit n/a

Fees Spread only

No. assets 17000+

Demo account Yes

Visit site

IG review

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Step 2. Decide how to buy SZSE composite

Copy link to section

This boils down to choosing between an SZSE composite ETF or CFD. ETFs are generally better suited to investors who want to passively track the SZSE composite’s performance. CFDs offer a greater range of trading options: you can use leverage, short the index, or buy and sell it outside of trading hours.

Step 3. Invest in the SZSE composite

Copy link to section

Sign into your trading account and search for the SZSE composite. Hit the ‘buy’ button and enter the details of your purchase, such as how much you want to spend. Hit ‘buy’ again to execute the trade.

Step 4. Monitor your investment

Copy link to section

When you buy a CFD, the trade goes through more or less instantly, and you’ll be able to see your new open position in your trading account. ETF purchases can take longer, and if you buy outside of traditional trading hours it won’t go through until the next morning.

Your trading account will show the price change in the SZSE composite since you bought it, so you can see your profit/loss at a glance. Use that information, along with your own research, to decide when to sell the SZSE composite and close your position, ideally at a profit!

The different ways to invest in the SZSE

Copy link to section

As we mentioned above, there are numerous ways to put your money into the SZSE composite. ETFs and CFDs are the simplest options for beginners, but there are alternatives. Here’s a brief overview of each option and who it’s best suited for.

SZSE composite ETFs

Copy link to section

An ETF (exchange-traded fund) is an investment fund traded on a stock exchange, much like a stock. Exchange traded funds can hold different assets, such as individual stocks, bonds, or commodities, or serve as a proxy for a stock market index.

An SZSE composite ETF is one way of investing in the SZSE composite. It’s simply an investment fund that mirrors the performance of the SZSE composite. When you buy shares in the fund, the value of your investment will rise or fall with the SZSE composite itself. 

ETFs are ideal for new investors because they have a very low minimum investment. You can start with a few pounds and get exposure to some of the world’s largest companies. They’re also practical if you plan on trading the SZSE composite index, because you can buy or sell shares in the fund throughout the day.

Examples of popular SZSE ETFs

• iShares China A50 ETF (2823.HK)
• CSOP FTSE China A50 ETF (2822.HK)
• Harvest CSI 300 Index ETF (0315.HK)

SZSE composite index funds

Copy link to section

An index or mutual fund is an investment fund that aims to track the performance of a stock market index, such as the SZSE composite. It’s very similar to an ETF, in that there are low management fees and you can buy shares through your online broker.

However, there are a couple of differences. SZSE composite index funds are only priced at the end of each trading day, so you can buy or sell shares in the fund once per day. There may also be a higher barrier to entry, through a much larger minimum investment when you invest in SZSE composite index funds.

That means an SZSE composite mutual fund is better suited for long term investors with a higher initial budget, where the infrequent trading and barriers to entry are far less of an issue.

Examples of popular SZSE index funds/mutual funds

• China AMC CSI 300 Index Fund (161812.SZ)
• E Fund CSI 300 Index Fund (110020.SZ)
• Hua An CSI 300 Index Fund (510300.SH)

SZSE composite CFDs

Copy link to section

CFDs (contracts for difference) are a way to speculate on SZSE composite price changes with more flexibility than if you use an ETF or index fund. A CFD is a ‘derivative’, which means it gets its value from the underlying asset – in this case the SZSE composite – but it’s separate from it.

As a result, CFDs can be leveraged, where you borrow money to multiply the size of the trade, or they can be used to go ‘short’, where you place a trade on the index to fall in value. You can also buy and sell them outside of regular trading hours.

All of this means SZSE composite CFDs offer the potential to outperform a fund that passively tracks the SZSE composite’s performance. Of course, you can also underperform it as well. Tools like leverage and shorting introduce a lot more risk, and are best left to experienced traders.

SZSE composite futures

Copy link to section

Futures contracts are agreements to buy or sell the SZSE at an agreed price on a set date in the future. SZSE composite futures are a means to predict how you think the index is going to perform over a set time frame, such as the next three or six months.

Most futures contracts involve leverage, so you only put up a small part of the total trade value (the margin) when you buy one. That makes futures more risky, and they require a bit more financial expertise to understand as well.

Some traders use futures as a hedge against the performance of stocks they own. For instance, if you own stocks that are part of the SZSE composite then you might want to short the SZSE composite so that you still make some money if the price falls.

SZSE composite stocks

Copy link to section

Another way to invest in the SZSE composite is to buy shares in the individual stocks that the index tracks. It isn’t practical to buy every share in the index, but you can invest directly into a few of the most heavily weighted stocks in the SZSE composite in order to get broad exposure to its performance.

The most heavily weighted stocks in the SZSE composite tend to be the largest companies by market capitalisation. If you invest directly in those largest stocks, you gain exposure to the index without taking on the risk of all the underlying companies.

One reason to do this is that these larger companies with the highest market cap dominate the index anyway, so that it can give you the impression of a diversified portfolio while actually being reliant on the performance of those particular stocks.

For the SZSE composite index, the largest stocks you might choose to invest in are:

Company	Index weight
Ping An Insurance (601318.SS)	5.5%
Tencent Holdings (0700.HK)	4.7%
China Merchants Bank (600036.SS)	3.6%
China Vanke (000002.SZ)	3.5%
Kweichow Moutai (600519.SS)	3.1%
China Southern Airlines (600029.SS)	2.8%
China Petroleum & Chemical (600028.SS)	2.7%
China International Travel Service (601888.SS)	2.7%
China Life Insurance (601628.SS)	2.6%
Industrial and Commercial Bank of China (601398.SS)	2.6%

The flip side of investing directly like this is that you lose the diversification and stability that comes with buying into an entire index. It requires much more hands-on management to do your own stock picking, so it’s best suited to more experienced investors.

How much does it cost to invest in the SZSE composite index?

Copy link to section

From $0 to $5, depending on how you invest. For each option, you must consider the cost of buying the actual asset, whether that’s an ETF, index fund, CFD, or share, plus the fees associated with it.

Instrument	Trading fee	Management fee
Exchange traded funds	$0-$5.99	0-0.2%
Index fund / mutual fund	$0-$5.99	0.1-2%
Individual stock	$0-$3	None
CFD	$0	None

*A fee comparison of 3 leading brokers for example purposes

ETFs and CFDs are generally the cheapest option overall, as they have low fees and a low minimum investment. Index funds and mutual funds have low fees but may have a high minimum investment. Buying individual stocks is the most expensive option in absolute terms, because the share price of a single large company is often more than $100.

All options are likely to include a trading fee, which you pay each time you make a transaction. Some trading platforms offer zero-fee trading, with others it may be a few dollars. 

Then ETFs and index funds each have their own expense ratio. Expense ratios refer to an annual management fee, charged as a percentage of your total investment. Expense ratios are usually no more than 0.05%, so if you invest $1,000, you would pay $5 per year in management fees.

Should I invest in the SZSE composite index? 

Copy link to section

Yes, SZSE composite investing is a great choice if you’re looking for a safer investment with more price stability compared to picking individual stocks. It gives you an instantly diverse portfolio with exposure to a broad area of the stock market.

The flip side is that you have less control over which companies you invest in. An index committee decides how the index works, and you can’t pick and choose the underlying companies you like the most. The SZSE composite is better suited to hands-off investors, compared to those who have the skills, experience, and desire to pick their own stocks.

What are the advantages of investing in the SZSE composite index?

Copy link to section

An index provides instant stock market diversification, where you spread your risk across a large number of underlying companies, rather than one or two. Here are some more reasons why you might want to invest in the SZSE composite index:

• The index provides exposure to a diverse range of stocks. The SZSE composite is made up of over 1,000 companies listed on the Shenzhen Stock Exchange, giving investors access to many of the benefits diversification provides. 
• By investing in the index, you’ll be exposed to many industries. The SZSE index includes companies from many of China’s leading industries, including technology, healthcare, financial services, and consumer goods. 
• The growth potential is high. The Chinese economy has been growing exponentially over the past two decades and is expected to continue. Investing in the SZSE means you’ll be able to benefit from the future growth of the economy. 
• Some of China’s most innovative businesses belong to the index. By investing in the SZSE index, you’ll be investing in some of the country’s most innovative and dynamic companies, such as Tencent, Ping An Insurance, and Huawei Technologies. 

What are the disadvantages of investing in the SZSE composite index?

Copy link to section

The main risk of investing in the SZSE composite is that all the underlying companies are related in some way, so a broader economic downturn that affected the entire country would likely affect many stocks in the index at the same time. Here are some more risks of SZSE composite investing.

• The political and regulatory landscape is unstable. There are many political and regulatory risks associated with investing in China. Government interference and trade disputes are two things to be aware of. 
• Chinese companies are required to disclose less information. Chinese companies do not fall under the same rules as those in the West. Most notably, less transparency is required, which can make it difficult for investors to understand the risks and opportunities fully. 
• The index is volatile. Much like other indexes, the SZSE is volatile and wild price swings are not uncommon. This makes investing, at least for the short term, more risky. 

FAQs

Copy link to section

---