In most American households, the washing machine keeps a low profile. Consumers may want their washer to be energy-efficient, water-saving, or even “smart,” but they don’t care how it looks. Not so in China, where a washer is a sign that you’ve arrived economically—especially if it’s stylish. That explains the aesthetic of Wuxi Little Swan. The appliance company sells a gold washing machine dubbed “Killer” that looks like a retro robot, along with a portable Mickey Mouse washer for new parents. It has ridden its apartment-friendly designs to become China’s second-biggest seller of washing machines, with sales of about $2.4 billion in 2016.

Before long, many more U.S. investors will get a chance to clean up on companies like Little Swan. This summer, MSCI, one of the most prominent creators of investment indexes, added “A-shares”—stocks that trade only on China’s domestic exchanges—to its emerging-markets index. The move was an acknowledgment that more Chinese companies meet international standards for accounting transparency and liquidity. And it means that, beginning next May, 222 A-shares like Little Swan will join investors’ portfolios for the first time, via their emerging-markets index and exchange-traded funds.

That’s a gravitational shift. Currently, most Chinese stocks owned by U.S. investors trade either on U.S. exchanges or in Hong Kong. Although China’s main domestic exchanges, in Shanghai and Shenzhen, account for nearly 10% of the global stock universe, U.S. shareholders owned only $103.6 billion worth of Chinese-traded stocks in 2016, a tiny fraction of their total holdings. But that number is expected to grow exponentially in the wake of MSCI’s move, and some investors are pouncing on A-share stocks today, assuming they’ll enjoy a price bump when money from index funds pours in.

Nicolas Rapp

Should you follow suit? Skeptics note that this isn’t the ideal time to buy Chinese equities. China’s frothy housing market and its escalating debt, which reached 260% of GDP at the end of 2016, have stoked fears of a looming slump. Its markets are also more volatile than America’s, in part because they’re dominated…