Hi, now since Chinese equity has moved down due to corona, it seems like cheap. What are the best China equity etfs listed in Europe? What do you guys think of investing in those now?
FXI is a heavily Chinese based ETF that has recently fell flat on its face. I recently took very mild bullish trades in the energy sector XLE as well oil XOP as they’ve both gotten creamed lately.
Can't help much ... I'd have to assess the available Chinese market ETF's to provide a useful answer ... and I haven't traded in that space.
My view is that the coronavirus outbreak hit the global economy hard, and even China contained the spread for now, it could took several months for US and Europe to control the pandemic. China’s GDP growth could lowed to 4-5% region due to the covid-19 outbreak. And we also expect central banks and governments to offer strong stimulus measures to counter the outbreak. So for the short-term in China market, the strategy should more about risk control, safer assets, like cash and high grade bonds could be the choices. For the longer period, when we confirmed that the covid-19 could be contained globally, we can pick equity, especially those sectors that can suffer less in a slowed economy, such as those sectors acyclic, like food and beverage, medicine, and those sectors that boosted by government stimulus plan, like semiconductor, cloud computing, 5G and consumer electronics. We believed that compared to the other nations, China has larger room to maneuver in fiscal policies, such as raised the budget deficit target to 3.2% and offer more special bonds to target industries. So we got more reasons to have exposure in China equity, for the outbreak control advantage in the near term and for the stimulus potential in the longer term. Sectors that benefited from government stimulus plan can be found more in IC index(with underlying ETF code 510500), which is also more sensitive to market liquidity. IH index(with underlying ETF code 510050 ) is more about value, and for now the valuing is in the 25% quantile of the last two years. Investors can allocate fund more in IC if the market risk appetite recovered. And in a gloomy scenario for China economy, IH could provide more safety than IC. And the timing for the market style switching, we believed it’s more depends on the development of current covid-19 outbreak. for more market info of China, can try https://fangquant.com/node/financial-futures