KraneShares CIO Brendan Ahern joins Morning Brief to discuss how investors can best play the China stock rally.

"On Monday on the Shanghai and Shenzhen Stock Exchange, you had 5,000 stocks went up, four went down. So this is an everything going up [rally]," Ahem tells Yahoo Finance. He believes that investors will gravitate toward growth stocks, and highlights KraneShares's KWEB ETF (KWEB), which targets Chinese internet names. He explains, "People look at the e-commerce space because that's the transmission engine for domestic consumption as it occurs online."

He notes that China can be thought of as two different markets: offshore and onshore. In other words, China's major markets can be split up between the offshore Hong Kong Stock Exchange and the mainland Shanghai and Shenzhen Stock Exchanges. He explains that the onshore China market is more for Chinese investors while the offshore China market is more geared toward foreign investors.

Ahern adds that KWEB is still 70% below its historical average in terms of its one-year forward P/E (price-to-earnings ratio), which shows "how depressed the evisceration of Chinese equities is as an asset class." Thus, he believes there is a lot more upside to China stocks, and believes the rally can continue.

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This post was written by Melanie Riehl