Chinese stock market on the way to a special event
Chinese stock market on the way to a special event
There are 2 types of Chinese shares: domestic and foreign. The fading fear of a trade war between the United States and China creates renewed interest in domestic equities. Just for the 3rd time since 2016, domestic equities are on the point of performing better than 'foreign' equities.
The Shanghai Composite Index shows a profit of 1.9% for the month of May on a profit of 1.6% for the MSCI China Index. It is a small difference, but it shows that interest in domestic Chinese equities is returning.
Even more special is that the profit comes in a period when most stock markets from the growth countries are in the rags basket. The US dollar has been trading for a while, putting the currency and stock markets of various growth countries under heavy pressure.
With an average price / earnings ratio of 12 and a discount of 7% compared to MSCI China, the largest discount since 2014, Chinese 'domestic' shares are again attractive as long as the trade war with the US does not escalate.
Invest in growth markets with an ETF
Every publisher of ETFs must now provide a KIID (Key Investor Information Document) with the ETF, in the investor's language of instruction.
As a result, many ETFs are no longer tradable. And now let the more specialized ETFs be offered by the parties that do not submit an KIID -document. As a result, many interesting ETFs, including the ETFs with a focus on the growth markets, are no longer marketable.
This means that investors have to roll up their sleeves even further, and have to put together a basket of interesting shares themselves in order to obtain a comparable result in their portfolio.
Source: Yahoo Finance
Interesting article.