The difference between A- and H-share

While there is commonality in the underlying stocks within  A-share and  H-share
markets, they are different in several dimensions:

• The H-share market, which covers  state-owned enterprises listed in Hong Kong, allows for the free flow of capital and for high participation from international institutional investors. The A-share market operates within mainland China and is dominated by domestic retail investors, with less than 1% foreign participation.

• Domestic A-shares have tended to have a low correlation with the global economy and equity markets. Chinese  H-shares trading on the Hong Kong Stock Exchange have had a much higher correlation with global markets due to the free flow of foreign capital.

• The A-share market is more concentrated toward the material and industrial sectors, while the H-share market has higher exposure to telecommunications and energy companies.