Advisors consider opportunities in Chinese stocks as nations’ leaders meet
investmentnews.comThe Biden administration is meeting with China’s top diplomats this week to try to repair a relationship between the two superpowers that has grown rocky.
The question facing financial advisors and investors now is whether they should do the same resetting with Chinese stocks.
Secretary of State Antony Blinken and National Security Adviser Jake Sullivan have a series of meetings starting Thursday with Chinese Foreign Minister Wang Yi to discuss China’s role in global affairs, including the Israel-Hamas and Russia-Ukraine wars. Those meetings could set the stage for a summit between President Joe Biden and Chinese President Xi Jinping next month at the Asia-Pacific Economic Cooperation forum of leaders gathering in San Francisco.
While politicians from the U.S. and China plot out a new political path forward, financial advisors can use the occasion to reassess their view of Chinese stocks, which have been struggling this year. The $6.9 billion iShares MSCI China ETF (MCHI), which boasts technology and retail giants Tencent Holdings (13.3%) and Alibaba (9.1%) as its two largest holdings, is down 7.5% year to date.
Not faring much better of late is the once unstoppable Chinese economy. Earlier this month, the International Monetary Fundlowered its growth forecast for China to 5% this year and 4.2% next year as a result of worries about its real estate sector.
Meanwhile, on this side of the Pacific, the SPDR S&P 500 ETF Trust (SPY) tracking America’s largest corporations is up 9% so far in 2023, as the American economy continues to outperform Wall Street’s best expectations.
Despite the divergent performances, Ben Harburg, portfolio manager for the recently launched Core Values Alpha Greater China Growth ETF (CGRO), believes
Read more on investmentnews.com
