H-Shares

The U.K. used to have a big empire. India. America. Australia. South Africa. And, most important for our particular interest here, Hong Kong.

Most of this empire has disappeared over the years. Hong Kong was one of the last major chunks to go, with sovereignty turning over to China in 1997. Because the city spent so long under British control, though, its financial system is somewhat separate from the rest of China, and it operates under some different regulations.

Here's where the "H-Shares" come into play. These equity securities represent shares of companies that are headquartered in mainland China, but trade on the Hong Kong Stock Exchange.

There are also stock exchanges in two other Chinese cities: Shanghai and Shenzhen. If a Chinese company lists on these exchanges, those shares are known as A-Shares.