Business is booming.

Global investors pump money into Chinese equity ETFs

72


Interested in ETFs?

Visit our ETF Hub for investor news and education, market updates and analysis and easy-to-use tools to help you select the right ETFs.

Investors are pumping money into exchange traded funds focused on Chinese equities despite jitters over Chinese government interventions which have rattled a number of stocks and sectors this year.

President Xi Jinping’s “common prosperity” agenda has wiped more than $1tn from the market value of Chinese equities since February as a series of regulatory blows have targeted sectors from video games and technology to property and education.

Yet three China-focused ETFs, ChinaAMC MSCI China A 50 Connect, E Fund MSCI China A 50 Connect ETF and China Universal MSCI China A 50 Connect ETF, were among the top 15 globally for net inflows in November, according to ETFGI, a London-based consultancy, pulling in a combined $4.6bn.

More strikingly still, KraneShares CSI China Internet ETF (KWEB) has seen $7.8bn of net inflows since mid-February, more than twice as much as any other US-listed thematic ETF, according to Goldman Sachs.

Some now see opportunities in the beaten-up Chinese equity market, which is down by a third from its February peak in dollar terms.

“We are modestly positive on Chinese equities. We think the equity risk premium compensates investors for the risk. In other words, they are cheap,” said Karim Chedid, head of investment strategy for iShares in the Emea region.

“Chinese equities are still under-represented in the global indices and the direction is going to continue to be upward. Now might be a good time to allocate on a long-term view,” he added.

Jose Garcia-Zarate, associate director, passive strategies research at Morningstar said the outlook looked attractive for investors. “The growth picture in China is rebounding much more quickly than other economies. That helps explain interest in the equity side.”

Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors, agreed, saying “growth, while slowing, is still somewhat stronger than in developed nations”. He believed the latest inflows were partly a case of investors trying to buy the dip.

The KraneShares ETF’s asset-raising success has come despite Chinese technology companies enduring a year of regulatory turbulence in the wake of the cancellation of the $37bn initial public offering of Ant Group, Jack Ma’s online finance company, in November 2020.

KWEB’s share price has fallen 46 per cent so far this year partly as a result, yet some believe its key holdings, which include Tencent, Alibaba, JD.com, Baidu and Pinduoduo, remain integral to consumer spending in the world’s second-largest economy.

“You could argue that a third of all the retail sales in China go into companies in KWEB,” said Brendan Ahern, chief investment officer of KraneShares.

“In equities, investors see that China is becoming an asset class [in its own right],” he added pointing to similarities with what happened with Japan in the 1980s and 1990s when it bifurcated, in the eyes of many investors, from the wider Asia-Pacific region.

Strong demand for Chinese equity ETFs has been mirrored by that for the country’s bond ETFs — the $12.1bn iShares China CNY Bond Ucits ETF (CNYB) has the second-largest fixed-income ETF in Europe just two years after its launch.

Column chart of Monthly flows into emerging market equity ETFs ($bn) showing Granular exposure

China-focused ETFs’ fortunes contrast with that of the broader emerging market universe. Data from BlackRock’s iShares arm show that flows into broad global emerging market equity ETFs have collapsed in recent months, with money instead being pumped into regional or single-country funds, led by Chinese and, perhaps more surprisingly, Brazilian funds.

“Emerging markets are seeing more permanent damage from the Covid-19-related activity drop and recession. They are not coming back like developed markets,” said Chedid. “As a broad complex it’s looking more challenging, so ETF investors are going more granular.”

He noted that Brazil “has been an underperformer”, with the MSCI Brazil index down 21.6 per cent year-to-date in dollar terms, so some investors may be betting on it bottoming out.

Bartolini was unconvinced, however, with his data showing net outflows of almost $2bn from single-country EM equity funds this year, barring the $13bn of inflows to Chinese funds.

Instead, he saw signs of strategic allocation to sectors, with $77bn pumped into largely cyclical industries such as financials, energy and real estate this year — a trend that is now showing signs of reversing with defensive sectors such as healthcare and consumer staples back in vogue as investors finally start to price in expectations of a semblance of developed world monetary tightening.

Additional reporting by Emma Boyde

Click here to visit the ETF Hub



Source link

72 Comments
  1. Iomhpd says

    levofloxacin pills order levaquin pill

  2. Ceaqtz says

    avodart cost celebrex 200mg pills buy ondansetron 4mg online cheap

  3. Jyfndq says

    buy generic spironolactone 25mg fluconazole 100mg generic fluconazole us

  4. Suikho says

    ampicillin 500mg uk buy bactrim pill buy erythromycin 250mg generic

  5. Updled says

    cost fildena buy nolvadex 10mg without prescription robaxin order

  6. Yjuiwd says

    purchase sildenafil for sale purchase suhagra sale estrace 2mg canada

  7. Fokrcd says

    buy lamotrigine 50mg without prescription retin cream usa generic retin

  8. Rzrygt says

    buy tadalafil 20mg pills avana 100mg sale buy diclofenac pills

  9. Fjdxtt says

    purchase accutane without prescription amoxicillin 1000mg sale azithromycin 500mg generic

  10. Mswqxs says

    buy indomethacin online cheap buy generic indomethacin order amoxicillin pills

  11. Erpsdn says

    order tadalafil US viagra sales order sildenafil 50mg without prescription

  12. Dfcfkw says

    arimidex brand best place to buy viagra online reviews buy sildenafil 100mg generic

  13. Owvitr says

    tadalafil 10mg generique en pharmacie acheter 5mg cialis en ligne viagra 25mg en ligne

  14. Mkfwxs says

    cost prednisone 40mg where to get cialis cheap order sildenafil 50mg online cheap

  15. Ullwde says

    tadalafil 10mg kaufen ohne rezept cialis kaufen für männer sildenafil 50mg kaufen ohne rezept

  16. Pfwpep says

    accutane 40mg sale cheap zithromax 250mg ivermectin 20 mg

  17. Pjsixw says

    buy ramipril 5mg generic order altace 5mg pills azelastine canada

  18. Coftlp says

    clonidine 0.1 mg without prescription order clonidine 0.1mg generic buy tiotropium bromide 9 mcg pill

  19. Swewbj says

    order buspar sale ditropan 5mg canada cheap oxybutynin

  20. Smsfol says

    buy alendronate 35mg online buy ibuprofen 400mg pill buy generic pepcid

  21. Fgminl says

    olmesartan 10mg oral buy acetazolamide for sale acetazolamide for sale online

  22. Wvvgte says

    prograf 1mg without prescription urso 150mg us order ursodiol 300mg online

  23. Fbkawi says

    isosorbide usa isosorbide 40mg price order telmisartan pill

  24. Ndjoxw says

    buy bupropion 150mg cetirizine 10mg for sale buy quetiapine online

  25. Iksgvk says

    molnunat 200 mg cheap order prevacid sale purchase lansoprazole pill

  26. Ndtdtb says

    buy zoloft 100mg for sale order kamagra for sale sildenafil 50mg ca

  27. Vfocal says

    purchase imuran without prescription buy pantoprazole 20mg generic us viagra sales

  28. Smtsyj says

    cialis oral is generic viagra legal oral viagra 50mg

  29. Haiwfh says

    cialis order buy pyridium 200 mg generic order amantadine 100mg

  30. Upurrx says

    revia online order albenza 400 mg pills cost abilify 30mg

  31. Oaptqj says

    avlosulfon 100 mg tablet allegra drug order perindopril 8mg online

  32. Ienpqm says

    order provera 10mg online microzide 25mg canada periactin ca

  33. Ckejof says

    provigil 100mg usa modafinil canada stromectol price

  34. Aaoimk says

    buy luvox 50mg for sale buy duloxetine 40mg glipizide brand

  35. Uwhioj says

    order accutane for sale order amoxicillin 250mg online cheap deltasone 40mg ca

  36. Gysyek says

    zithromax 250mg canada gabapentin 800mg oral order gabapentin 600mg online cheap

  37. Jqhput says

    cialis for daily use buy sildenafil 50mg sildenafil 50mg tablet

  38. Euewgc says

    buy lasix 100mg pills doxycycline 200mg generic plaquenil 400mg price

  39. Mjyjpb says

    viagra cialis clomipramine 50mg drug clomipramine online

  40. Lquech says

    cost glycomet 1000mg glycomet uk tadalafil 20mg tablet

  41. Uuoljw says

    buy olanzapine 10mg sale cost zyprexa diovan 80mg over the counter

  42. Wpkgeb says

    buy norvasc online cheap viagra cialis tadalafil 20mg for sale

  43. Cfflcq says

    order clozaril for sale dexamethasone cost buy dexamethasone without prescription

  44. Muqkxi says

    50mg viagra buy viagra 100mg buy lisinopril 10mg for sale

  45. Urmlwk says

    buy zyvox 600 mg sale zyvox 600mg brand wind creek casino online play

  46. Fnospv says

    omeprazole generic dissertation writers online real casino online

  47. Nkvejv says

    order lopressor 100mg for sale order metoprolol 100mg buy levitra 20mg sale

  48. Xdwjyq says

    essay helpers academic writers online gambling game

  49. Ibzlnr says

    levitra medication pregabalin pills medrol 4 mg tablets

  50. Tjsfvu says

    helpwithassignment professional letter writing services buy sildenafil 50mg pills

  51. Czhnho says

    buy clomid sale sugarhouse casino online real casino slots online

  52. Bawdvc says

    brand tadalafil 20mg tadalafil 20mg drug buy sildenafil for sale

  53. Yunqqr says

    priligy over the counter misoprostol buy online order synthroid 75mcg online

  54. Dcvosn says

    orlistat 120mg us brand xenical 120mg order zovirax 400mg pills

  55. Xmfwdu says

    buy cialis 20mg for sale purchase cialis pill order plavix generic

  56. Sxrguz says

    brand zyloprim 300mg generic zyloprim 300mg buy ezetimibe generic

  57. Bqikdw says

    methotrexate 10mg sale methotrexate 10mg ca order reglan 20mg pill

  58. Zxsemn says

    domperidone pills sumycin 500mg usa buy cyclobenzaprine without prescription

  59. Wnyhrk says

    buy losartan generic order topamax 200mg topamax 200mg pill

  60. Hbwhha says

    order ozobax without prescription buy ozobax online buy toradol 10mg sale

  61. Wyhkgp says

    buy imitrex 50mg sale order levofloxacin 250mg generic buy avodart 0.5mg pills

  62. Medxta says

    buy colchicine pills play casino games for cash slot online

  63. Lyrlcv says

    buy zantac 150mg without prescription zantac 150mg cost celebrex 200mg generic

  64. Uxmutd says

    luckyland slots bonus casino best online casino

  65. Nyatsl says

    buy tamsulosin online cheap ondansetron for sale purchase spironolactone pill

  66. Ogoflu says

    cheap tadalafil 5mg buy ciprofloxacin 500mg online purchase cipro online cheap

  67. Muqkzj says

    zocor us valacyclovir price finasteride over the counter

  68. Soedkb says

    purchase metronidazole for sale cost augmentin 1000mg trimethoprim cost

  69. Kxvtdl says

    order diflucan 200mg sale diflucan 200mg tablet viagra cheap

  70. Plreil says

    cefuroxime cost buy generic careprost robaxin price

  71. Cicczr says

    best online casinos planning poker online tadalafil 20mg generic

  72. Kptdyo says

    buy desyrel 100mg pill order sildenafil 100mg without prescription purchase aurogra pills

Leave A Reply

Your email address will not be published.