Yuan is a pegged currency. This is a widowmaker trade even for a hedge fund. The average investor would be far, far better off taking actual positions in Chinese stocks rather than getting into the global macro hedge fund style position on pegged currency unwinds (where metrics such as carry and convexity dominate the trade considerations, not the actual binary directional view).

And it's also worth noting that there has been strong divergence between the ADR Chinese market and the onshore Chinese market that westerners don't generally have access to, so tread lightly there as well because there is no guarantee the ADR paper trades as it "should".

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JKCalhoun 4 days ago | parent [-]

I should look for an ETF or index fund tied to Chinese state-owned markets (banks and airlines for example).

	▲	Fade_Dance 4 days ago \| parent [-]
		That often comes with restrictions and risks. For example, I was invested in China Mobile, but it was delisted from western exchanges after an executive order from the US added it to a blacklist due to Chinese military connections (which Chinese SOEs tend to have...) I also wouldn't recommend investing in Chinese banks in particular without understanding their credit landscape and the regional/central balance of power related topics. Know what you own and all that. I often have China positions on in the portfolios I manage, but imo it's mandatory to keep track of the communist party meetings and statements and such. It's not a free market, so investing decisions are anchored off of the chinese communist party political machinations to a large degree. When China decides on a new initiative like reigning in the tech space and making an example of the tech magnates (which literally erased some hot public growth sectors to near zero overnight), or engineering the controlled explosion of the housing bubble, you can't be ignorant of the active narratives. Especially difficult is that non-Chinese language news and analysis is often radically off the mark from intra-Chinese messaging. If you want a fire and forget it approach, this may be one of the few examples of a market where conservative active management with a focus on giving Chinese exposure to western participants may be prudent, as they can sidestep the long and esoteric list of known risks. But even then it's tough if one is in a jurisdiction exposed to, say, US blacklists which can wipe out an investment overnight and wreak havoc in a portfolio.