Two exchange-traded funds (ETFs) are employing distinct investment strategies to maximize profits in the Chinese market. Rayliant Quantamental China Equity ETF focuses on specific regions, while the new Roundhill China Dragons ETF is investing in the nation’s largest stocks.

The Roundhill China Dragons ETF, which launched on October 3 and currently focuses on nine companies, has experienced a nearly 5% drop as of its closing on Friday. According to Roundhill Investments CEO Dave Mazza, these firms share similarities to high-magnitude companies in the United States.

On the other hand, the Rayliant Quantamental China Equity ETF, active since 2020, concentrates on local Chinese stocks that are typically only accessible to local buyers. Jason Hsu of Rayliant Global Advisors, the firm behind this ETF, believes that investing in these companies provides a unique perspective as China is at a different stage in its growth curve.

Hsu aims to introduce U.S. investors to less-known stocks that have the potential to yield substantial returns, similar to recent Big Tech stocks. He highlights that high-growth stocks aren’t limited to the tech industry, with sectors such as water supply and restaurant chains also showing promising growth. He notes that these sectors are often overlooked due to the lack of research outside of China, thus potentially representing an opportunity for thematic trading within China.

As of its closing on Friday, the Rayliant Quantamental China Equity ETF has seen an impressive increase of over 24% this year. This illustrates the potential gains for investors who are interested in exploring less traditional sectors and markets.