Billionaire David Tepper Bought These 2 ETFs in Q2. Should You Buy Them, Too?
Tepper sold many stocks in Q2, but increased his hedge fund's positions in two ETFs. These ETFs share several common denominators.
FXI: Large-Cap Chinese Stocks Are On A Slippery Slope
China's looming net investor outflows might impact its large-cap stocks and the iShares China Large-Cap ETF, in particular. The FXI ETF has underperformed the MSCI World ETF and other emerging market vehicles in past years. Additional underperformance is likely, as China's slowing economy and instability in the banking industry pose threats to cyclical vehicles such as the FXI ETF.
10 Most Heavily Traded ETFs of Q2
We have highlighted 10 ETFs that have seen higher average volumes in the second quarter and are thus the top 10 funds in terms of trading volume.
Is The Chinese Stock Market Truly Uninvestable?
China critics believe Chinese stocks are uninvestable due to a myriad of economic and geopolitical issues. The Chinese stock market being down more than -60% shows many investors believe the same.
FXI: A Portfolio Capturing China Reversal And Secular Trends
China's risks seem apparent, but we can take a step back and see if the economic fundamentals are truly distorted amid all the challenges we've seen. A recovery is likely. FXI trades at a weak multiple of ~11x, which offers potential for a growth and a value trade if certain macro conditions are met in the near term. The property sector should not be compared to other systemic crises and recovery is a matter of time given long-term economic fundamentals and inventory pressure.
FXI: A Contrarian Investment Opportunity
iShares China Large-Cap ETF experienced a recovery of 20.7% to $26.80 per share in June 2024, outperforming the S&P 500. Chinese stocks have been in a bearish trend since February 2021, lagging U.S. and European stocks near record highs. Value investors like Charlie Munger saw potential in Chinese stocks due to growth prospects and the value of leading companies.
Time for China ETFs?
Although the Chinese economy suffered a lot on various issues in the past one year, the economy is slowly showing signs of a recovery.
Why This Could Be A Great Time To Buy China
China's government takes action to save property and stocks, leading to a bounce in struggling share prices. Investment managers are rushing back to China as fund launches reach a record high, capitalizing on the weak yuan. The iShares China Large-Cap ETF is outperforming the S&P 500, offering potential currency gains and exposure to consumer revival.
