FXI vs KWEB: Which ETF Is Better in 2026?
A metric-by-metric comparison of iShares China Large-Cap ETF (FXI) and KraneShares CSI China Internet ETF (KWEB) — both Single Country - Emerging funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
FXI and KWEB compete directly — both are Single Country - Emerging funds chasing the same job in a portfolio. That makes this a genuine either/or: the index each tracks, what it costs, and how it has handled drawdowns are what separate them, not the broad exposure they give you.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — FXI scores higher: 31.9 (Grade F) versus 27.1 for KWEB. That doesn't make KWEB a bad fund; it means FXI currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| FXI | KWEB | |
|---|---|---|
| Category | Single Country - Emerging | Single Country - Emerging |
| Expense ratio | 0.73% | 0.70% |
| Fund size (AUM) | $4.5B | $4.9B |
| Dividend yield | 2.41% | 8.61% |
| 1-year return | -9.88% | -24.74% |
| 3-year return | +22.62% | -8.18% |
| Volatility | 20.17% | 27.63% |
| Max drawdown | -28.72% | -41.62% |
| Sharpe ratio | -0.74 | -1.08 |
| ETFValuer score | 31.9 | 27.1 |
| Grade | F | F |
| Overall rank | #444 | #455 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
KWEB is the cheaper fund, charging 0.70% a year versus 0.73% for FXI — a gap of 0.03 percentage points (about $3.00/year on a $10,000 position) that compounds meaningfully over a multi-decade holding period. See the ETF Fee Calculator for the exact dollar impact at your investment size and horizon.
What FXI's Fees Cost You
FXI charges an expense ratio of 0.73% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, FXI returned +22.62% versus -8.18% for KWEB — a gap of about 30.8 percentage points. On risk, FXI has held up better historically, with a shallower max drawdown (-28.72% vs. -41.62%). FXI currently has the better risk-adjusted return (Sharpe ratio of -0.74 vs. -1.08), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), FXI and KWEB show a high correlation of 0.939 — closely related, but not identical. Holding both would add very little diversification: when one falls, the other almost always falls with it. Treat these as alternatives to each other, not as complements in the same portfolio.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.939 | High — closely related, but not identical |
| R-squared | 88.1% | 88.1% of FXI's daily moves are explained by KWEB's |
| Tracking error (annualised) | 12.78% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | FXI +9.39% · KWEB -0.14% | FXI ahead by 9.53 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, FXI finished as much as +20.1 points ahead of KWEB at the best extreme and -7.6 points at the worst — a 27.7-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
FXI and KWEB hold 4 of the same companies among their top 10 positions. Those shared names make up 24.7% of FXI and 32.3% of KWEB. That's meaningful duplication. The funds aren't interchangeable, but a good share of your money would be riding on the same companies twice.
| Shared Holding | FXI Weight | KWEB Weight |
|---|---|---|
| Tencent Holdings Limited | 7.72% | 10.09% |
| Alibaba Group Holding Limited | 8.66% | 8.93% |
| MEITUAN | 4.79% | 7.36% |
| NETEASE, INC. | 3.56% | 5.91% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean FXI if…
- It has been the calmer ride (20.2% volatility vs 27.6%) with a shallower worst-case fall (-28.7% vs -41.6%)
- You care about return per unit of risk — its Sharpe ratio of -0.74 beats -1.08
- You weight recent results heavily — it returned 22.6% over 3 years against -8.2%
Lean KWEB if…
- You want the lower running cost — 0.70% vs 0.73%, about $3 a year less on a $10,000 position
- Current income matters to you — it yields 8.61% against 2.41%
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is FXI or KWEB better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — FXI scores higher: 31.9 (Grade F) versus 27.1 for KWEB. That doesn't make KWEB a bad fund; it means FXI currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, FXI or KWEB?
KWEB currently has the lower expense ratio (0.70% vs. 0.73%).
Can I hold both FXI and KWEB?
You can, though the benefit is limited. At a correlation of 0.94, FXI and KWEB fall together far more often than not, so owning both adds complexity and a second expense ratio without much real diversification. Most investors are better served picking one.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.