Chinese stocks recorded their first annual gain in 2024, following a challenging three-year decline.
Chinese stocks have rebounded in 2024, driven by a significant fiscal stimulus package, but long-term prospects remain uncertain due to economic stagnation risks. The iShares China Large-Cap ETF has seen a 26% rise over 2024, yet it carries high risk with 33% volatility and substantial short interest. China's economic challenges include deflation, high debt, and potential "Japanization," raising doubts about sustained growth despite recent positive government actions.
Carter Worth, Worth Charting, joins 'Fast Money' to look at the technicals in China and see if it's time to buy into the emerging market stocks.
Chinese stocks are in for another volatile year as markets weigh the impact of Beijing's seesawing stimulus against the potential threat posed by U.S. trade policy.
The US-China decoupling is likely to accelerate under Donald Trump's second term. The Chinese economy is now more vulnerable than in 2017 during Trump's first term, which makes the situation more uncertain. The Chinese stock fund iShares China Large-Cap ETF is likely a value trap, and investors should stay away from it, from the long or short side.
The tight race has resulted in enough liquidity in the ETF world ahead of Election Day.
I am upgrading iShares China Large-Cap ETF to hold, expecting CCP-driven consumer confidence to boost GDP growth, corporate earnings, and stock prices. The Chinese market is better suited for trading rather than long-term investment, given its volatility compared to the S&P 500 and Nasdaq. FXI's portfolio lacks optimal exposure to domestic consumption and tech names, with a weighted upside potential of 13% to YE25 based on consensus price targets.
The iShares China Large-Cap ETF offers domestic investors exposure to large-cap Chinese equities traded on the Hong Kong Exchange. Recent Chinese government efforts to revive the economy have positively impacted FXI's performance. However, I have concerns the gains may temper out. Consumer confidence is very low and previous government spending plans have not come to full fruition. This makes me doubt how much of an impact the current plans will have.
Despite recent stimulus concerns, Chinese stocks remain undervalued compared to U.S. stocks, presenting a significant investment opportunity. Market obsession with stimulus measures is unhealthy; focus should be on long-term benefits from lower rates and economic fundamentals. Chinese stocks like Alibaba are unfairly punished; the disconnect between company performance and stock price offers value opportunities.
Exchange-traded funds (ETFs) offer investors the prospect of targeted, thematic portfolios and easy, hands-off management. Particularly considering that many of the most popular ETF strategies feature multiple funds from a variety of providers—and, as a result, competition for customer dollars—fees are often low.
Chinese shares were higher in morning trade, with the Shanghai Composite Index rising 0.45% to 3217.34, as investors watch a key briefing by China's housing ministry
The resurgence of China trade presents new investment opportunities, driven by improved economic indicators and favorable government policies. Comparative performance analysis of KWEB vs FXI reveals a far lower VIE weighting for one of the two. The SEC recently produced a white paper regarding VIE listed Chinese companies, many listed in Hong Kong are also VIEs.