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4 China ETFs Beating S&P 500 In Its Worst Week Since 2008

By Zacks Investment ResearchStock MarketsMar 23, 2020 08:00AM ET
www.investing.com/analysis/4-china-etfs-beating-sp-500-in-its-worst-week-since-2008-200518136
4 China ETFs Beating S&P 500 In Its Worst Week Since 2008
By Zacks Investment Research   |  Mar 23, 2020 08:00AM ET
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U.S. equities logged its worst week since 2008 amid the rising coronavirus fears. The S&P 500, the Dow Jones and the Nasdaq composite added 15%, 17.3% and 12.6% last week. The confirmed cases of coronavirus jumped 90% in Italy, 130% in France, 170% in Spain, 240% in Germany and 430% in the United States, which escalated the need for quarantine, lockdowns and constraints on daily life. Analysts anticipates ‘worst’ financial crisis since 1929.

Amid such crisis, China’s investing world showed great resistance to the coronavirus panic sell-offs despite being the epicentre of the pandemic. Analysts polled by Reuters expected China’s economic growth to likely slip to 3.5% in the first quarter of 2020, indicating a decline from the previous year’s reported level of 6%.

To contain such virus-induced slowdown, “since January 31, the central bank had allocated 184 billion yuan ($26.3 billion) of its 300-billion-yuan re-lending quota — money loaned to other banks — to support firms including those making equipment needed to contain the outbreak. Chinese banks had also issued 107.5 billion yuan in loans at favourable rates to small and agricultural firms.”

China’s central bank promised to implement ‘variety of measures’ to cut loan costs for firms. In order to infuse liquidity into the financial system, China's central bank injected 100 billion yuan (or around US$14.33 billion) into the market in mid-February. Again, on Mar 13, China’s central bank cut the reserve requirement ratio for the second time this year, infusing 550 billion yuan ($79 billion) in the coronavirus-hit economy.

Apart from compelling valuations, policy easing must have helped the space. The government and central banks of China left no stone unturned to fight the outbreak. Many China ETFs beat the S&P 500 in the past week and month (read: What Coronavirus? These China ETFs Gained Past Month).

Below we highlight a few China ETFs that have lost little last week compared with the global market bloodbath (returns are as of etfdb).

Global X MSCI China Communication Services ETF CHIC — Down 4.6%

The underlying MSCI China Communication Services 10/50 Index follows a rules-based methodology that is designed to select constituents of the MSCI China Index. Tencent, China Mobile, Netease, Baidu (NASDAQ:BIDU) and China Tower Corp hold the top five positions.

Loncar China BioPharma ETF (SI:CHNA) — Down 5.4%

The underlying Loncar China BioPharma Index seeks to track the performance of a modified equal-weighted portfolio of companies directly involved in growth of pharmaceutical and biotech-related industries from China.

KraneShares CSI China Internet ETF KWEB— Down 7.8%

The underlying CSI Overseas China Internet Index is designed to measure the performance of the investable universe of publicly traded China-based companies, primary business or businesses of which are in the Internet and Internet-related sectors.

KraneShares CSI China Five Year Plan ETF KFYP — Down 7.9%

The underlying CSI CICC Select 100 Index is designed to select 100 A-Shares companies with high and stable ROEs, high dividend yields and high earnings growth rates amongst a stock pool, which comprised the A-Shares companies with higher size, liquidity and operating revenues in each Industry Group per the CSI Industry Classification Standard (see all Asia-Pacific (Emerging) ETFs here).

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KraneShares CSI China Internet ETF (KWEB): ETF Research Reports

KraneShares CICC China Leaders 100 Index ETF (KFYP): ETF Research Reports

Global X MSCI China Communication Services ETF (CHIC): ETF Research Reports

Loncar China BioPharma ETF (CHNA): ETF Research Reports

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Zacks Investment Research

4 China ETFs Beating S&P 500 In Its Worst Week Since 2008
 

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4 China ETFs Beating S&P 500 In Its Worst Week Since 2008

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