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How to invest in the Shanghai Stock Exchange (SSE) from the UK
Find out the cheapest and easiest ways to invest in the world's fourth-largest stock exchange.
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What's in this guide?
The Shanghai Stock Exchange (SSE) is one of the world’s largest stock exchanges, and along with the Shenzhen Stock Exchange, is one of the two major exchanges operating in mainland China. Despite only being founded in 1990, the SSE is now the world’s fourth-largest exchange with a total market capitalisation of more than $5 trillion and over 1,000 stock listings.
Can I invest in the Shanghai Stock Exchange from the UK?
Yes, you can still invest in stocks on the SSE from the UK, but it’s not as straightforward as it is with many other foreign exchanges. The Shanghai Stock Exchange remains closed to direct investments from foreign individuals, but you can still invest via international investment companies, or by investing in China-focused exchange-traded funds (ETFs).
Many of the largest Chinese stocks on the Shanghai Stock Exchange are also listed on US-based exchanges like the New York Stock Exchange, so if you’re looking to buy a certain Chinese stock, it’s always worth checking if it’s available on British or US-based exchanges first.
How to invest in the Shanghai Stock Exchange
- Choose a broker or trading platform. When choosing a platform, make sure it lets you trade the specific SSE stocks you want to invest in. Different brokers also have different fee structures, and it’s important to find the one that will be most cost-effective for the way you’d like to invest.
- Open a share-trading account. Once you’ve selected a broker or platform, you’ll need to open a trading account before you can start investing in the SSE.
- Deposit funds. In order to begin trading, you’ll need to deposit money into your account. Depending on which platform you use, your money may be automatically converted from pounds into US dollars, and you may need to pay a foreign exchange fee.
- Buy SSE stocks. Once your account is funded, you’ll be able to buy and sell shares. Most brokers or platforms will let you search for the specific SSE stocks you want to buy.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
How much does it cost to invest in the Shanghai Stock Exchange?
This will really depend on the method of investing you use. If you use a broker or trading platform to buy SSE stocks, you’ll be charged based on its specific fee structure, and the cost of trades can vary significantly across different brokers and platforms.
Some brokers will charge large commissions on single trades, whereas others offer “fee-free” trading. If you’re only going to be investing small amounts, or plan on making multiple trades, it may be cheaper to go with a platform with low or no fees. You can compare trading fees below:
Broker trading fees
Below is a breakdown of the basic fees you’ll pay when making a single trade using each broker:
- eToro. No commission
- IG. No commission
- Degiro. £1.75 + 0.022% (max £5)
- Saxo Markets. £8
- Hargreaves Lansdown. £11.95
Shanghai Stock Exchange ETFs
A cheaper way to invest may be via a Shanghai Stock Exchange-focused fund, which tracks the performance of specific stocks on the exchange without you having to buy the stocks directly. Exchange-traded funds can give you exposure to Chinese stocks while generally only charging a small annual fee of around 0.10%.
One of the most popular Chinese stock ETFs is the Harvest CSI 300 China A-Shares ETF (ASHR), which tracks the performance of the top 300 stocks on the Shanghai and Shenzhen stock exchanges. There are also a number of other ETFs that track stocks found on the SSE, including:
- VanEck Vectors ChinaAMC CSI 300 ETF
- CSOP FTSE China A50 ETF
- KraneShares Bosera MSCI China A ETF
Other ways to invest in the SSE
Since 2003, foreign institutional investment firms have been able to buy certain Shanghai Stock Exchange-listed stocks through the Qualified Foreign Institutional Investor (QFII) programme. This means that you can still invest in so-called China A-shares by going through an accredited institutional company.
What are China A-shares?
China A-shares are stocks that trade on the Shanghai (SSE) and Shenzhen (SZSE) stock exchanges, but which are only available to Chinese investors or foreign institutions using the QFII system. A-shares are quoted in Chinese renminbi, and cannot be bought directly by foreign investors.
In comparison, China B-shares are stocks that are widely available to foreign investors, and are usually quoted in US dollars or other currencies.
Why should I invest in the SSE?
Despite it’s relative lack of coverage in the West, the Shanghai Stock Exchange is the world’s fourth-largest exchange, and the major exchange of China, which is the world’s second-largest country by GDP after the US.
The Shanghai Stock Exchange lists some of the world’s largest and most successful companies, and may offer investors a way to diversify their stock portfolio. While it can be hard to invest directly in the SSE, there are a number of Chinese-focused ETFs that make investing in the Chinese stock market quite straightforward.
Which stocks are on the Shanghai Stock Exchange?
The Shanghai Stock Exchange lists many of the largest Chinese-based companies, including:
- Kweichow Moutai Co Ltd
- Bank of Beijing
- Industrial Bank Co Ltd
- Guanghui Energy Co Ltd
- Agricultural Bank of China
- Bank of China Ltd
- China Life
- Hua Xia Bank Co Ltd
- Ping An Insurance
- China Merchants Bank
- PetroChina Co. Ltd
- Bank of China
- Haitian Flavouring & Food
- Hengrui Medicine
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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