Investors willing to make a long-term bet on China in a less risky way could find the CXSE ETF a compelling option. By excluding state-owned enterprises, the ETF focuses on businesses where shareholder returns and strong fundamentals matter the most. Yet, anti-monopoly rules, regulatory fines, or a wealth rebalance are among practices that have been and can be imposed by the Chinese government on any domestic business.
The long-awaited international equity renaissance might finally play out in 2025. If that happens, China stocks appear poised for leadership.
China equities turned in admiral performances last year. That's because there were hopes that PBOC might delivery wide-ranging monetary stimulus in 2025.
By Christopher Gannatti Key Takeaways August and September 2024 saw dramatic shifts in Japan and China's equity markets, with Japan's policy communication triggering a market spike up in the yen and down in equities, and China's stimulus leading to a rally—showing how quickly policy can reshape returns.
Interest rate cuts and plans for fiscal stimulus are the primary reasons why Chinese stocks have rallied of late. Over the past month, the MSCI China Index is higher by almost 20%.
The economy of China remains in a tenuous spot. But Beijing's renewed, overt emphasis on shoring up the world's second-largest has been a boon for previously downtrodden China stocks and related ETFs.
Following a scorching rally last week, the WisdomTree China ex-State-Owned Enterprises Fund (CXSE) tacked on another 1.84% on volume that was about 7x the daily average on Monday. Making that gain all the more impressive was the fact that the MSCI China Index closed slightly lower on the day.
Last week, China stocks and related ETFs delivered scintillating performances. That was due largely to fiscal and monetary measures that show Beijing is serious about propping up the its economy.