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Can China ETFs Shine Bright on Solid Economic Data?
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The world’s second-largest economy has again grabbed investor attention with new rounds of positive economic data releases. The data puts the spotlight on China’s rapid and very impressive rebound from the pandemic-led economic slowdown.
Economic Data in Detail
There was a 35.1% year-over-year rise in industrial output in the January-February period, per a Reuters article. The metric compares favorably with December’s 7.3% growth. It also surpassed economists’ forecast of 30% year-over-year growth, according to a Reuters’ poll.
Moreover, retail sales were up 33.8% year over year in the first two months of 2021. The figure also compares favorably with 4.6% growth in December and holds strong against a contraction of 20.5% in the months of January and February in 2020. Furthermore, the metric beat the analysts’ estimate of 32% growth, per a Reuters’ poll.
Moving on, fixed-asset investments gained 35% year over year in the January-February period. However, the metric lagged the forecast of a 40% rise. Meanwhile, the same compared favorably with a 24.5% contraction in January-February 2020.
It is worth mentioning here that the China government had imposed some travel restrictions to curb the spread of coronavirus cases before the Lunar New Year holidays, per a BloombergQuint article. Resultantly, labors remained in factories and industrial production didn’t have to face the holiday-induced slump. However, some consumer discretionary sectors like traveling, restaurant and leisure and entertainment-bound spending saw some sluggishness.
Studying the data, Louis Kuijs, head of Asia economics and Oxford Economics, commented, “We have a positive outlook for exports and manufacturing investment this year. And we expect household consumption to become a key driver of growth from Q2 onwards as confidence improves and the government’s call to reduce travel is toned down,” as mentioned in a Reuters article.
Moving on, China’s exports in dollar terms surged 154.9% year over year in February. The country’s exports climbed 60.6% year over year in the January-February period, surpassing analysts’ estimate of a 38.9% increase, per a Reuters’ poll.
China’s exports received support from high demand for medical products like personal protective equipment (PPE) and electronics products like fridges, toasters and microwaves on surging meeting work-from-home needs, as mentioned in a Reuters article.
China’s trade surplus with the United States was $51.26 billion in January-February 2021 in comparison to $29.92 billion in December 2020, per a Reuters article.
According to data from the National Bureau of Statistics, China’s GDP grew 6.5% in the fourth quarter of 2020, after 4.9% growth in the third quarter. The metric also beat economists’ forecast of 6.1% growth, per a Reuter’s poll. Notably, the world’s second-largest economy recorded economic growth of 2.3% in 2020. There is no doubt in the fact that China’s economy has come a long way from the steep 6.8% fall in the first three months of 2020. As mentioned in a BloombergQuint article, analysts expect China to see growth of 8.4% in 2021.
China ETFs That Can Gain
Against this backdrop, investors can keep a tab on a few China ETFs like iShares MSCI China ETF (MCHI - Free Report) , iShares China Large-Cap ETF (FXI - Free Report) , Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR - Free Report) , SPDR S&P China ETF (GXC - Free Report) , iShares MSCI China A ETF (CNYA - Free Report) and Invesco Golden Dragon China ETF (PGJ - Free Report) .
This fund seeks long-term growth by tracking the investment returns, before fees and expenses, of the FTSE China 50 Index. It comprises 50 holdings. The fund’s AUM is $4.01 billion and expense ratio is 0.74% (read: Top Foreign ETFs of 2020 That Are Up At Least 40%).
ASHR
This fund tracks the CSI 300 Index. It comprises 298 holdings. The fund’s AUM is $2.67 billion and expense ratio, 0.65%.
GXC
The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P China BMI Index. It comprises 820 holdings. The fund’s AUM is $1.90 billion and expense ratio is 0.59% (read: ETFs in Focus on Alibaba's Strong Fiscal Q2 Earnings).
CNYA
The fund tracks the MSCI China A Inclusion Index. It comprises 470 holdings. The fund’s AUM is $674.6 million and expense ratio is 0.60%.
PGJ
This fund follows the NASDAQ Golden Dragon China Index, which offers exposure to the U.S. exchange-listed companies headquartered or incorporated in the People’s Republic of China. It holds a basket of 70 stocks. The product has an AUM of $351.7 million and charges 70 basis points in annual fees.
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Can China ETFs Shine Bright on Solid Economic Data?
The world’s second-largest economy has again grabbed investor attention with new rounds of positive economic data releases. The data puts the spotlight on China’s rapid and very impressive rebound from the pandemic-led economic slowdown.
Economic Data in Detail
There was a 35.1% year-over-year rise in industrial output in the January-February period, per a Reuters article. The metric compares favorably with December’s 7.3% growth. It also surpassed economists’ forecast of 30% year-over-year growth, according to a Reuters’ poll.
Moreover, retail sales were up 33.8% year over year in the first two months of 2021. The figure also compares favorably with 4.6% growth in December and holds strong against a contraction of 20.5% in the months of January and February in 2020. Furthermore, the metric beat the analysts’ estimate of 32% growth, per a Reuters’ poll.
Moving on, fixed-asset investments gained 35% year over year in the January-February period. However, the metric lagged the forecast of a 40% rise. Meanwhile, the same compared favorably with a 24.5% contraction in January-February 2020.
It is worth mentioning here that the China government had imposed some travel restrictions to curb the spread of coronavirus cases before the Lunar New Year holidays, per a BloombergQuint article. Resultantly, labors remained in factories and industrial production didn’t have to face the holiday-induced slump. However, some consumer discretionary sectors like traveling, restaurant and leisure and entertainment-bound spending saw some sluggishness.
Studying the data, Louis Kuijs, head of Asia economics and Oxford Economics, commented, “We have a positive outlook for exports and manufacturing investment this year. And we expect household consumption to become a key driver of growth from Q2 onwards as confidence improves and the government’s call to reduce travel is toned down,” as mentioned in a Reuters article.
Moving on, China’s exports in dollar terms surged 154.9% year over year in February. The country’s exports climbed 60.6% year over year in the January-February period, surpassing analysts’ estimate of a 38.9% increase, per a Reuters’ poll.
China’s exports received support from high demand for medical products like personal protective equipment (PPE) and electronics products like fridges, toasters and microwaves on surging meeting work-from-home needs, as mentioned in a Reuters article.
China’s trade surplus with the United States was $51.26 billion in January-February 2021 in comparison to $29.92 billion in December 2020, per a Reuters article.
According to data from the National Bureau of Statistics, China’s GDP grew 6.5% in the fourth quarter of 2020, after 4.9% growth in the third quarter. The metric also beat economists’ forecast of 6.1% growth, per a Reuter’s poll. Notably, the world’s second-largest economy recorded economic growth of 2.3% in 2020. There is no doubt in the fact that China’s economy has come a long way from the steep 6.8% fall in the first three months of 2020. As mentioned in a BloombergQuint article, analysts expect China to see growth of 8.4% in 2021.
China ETFs That Can Gain
Against this backdrop, investors can keep a tab on a few China ETFs like iShares MSCI China ETF (MCHI - Free Report) , iShares China Large-Cap ETF (FXI - Free Report) , Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR - Free Report) , SPDR S&P China ETF (GXC - Free Report) , iShares MSCI China A ETF (CNYA - Free Report) and Invesco Golden Dragon China ETF (PGJ - Free Report) .
MCHI
This fund tracks the MSCI China Index. It comprises 598 holdings. The fund’s AUM is $6.78 billion and expense ratio, 0.59% (read: Alibaba Solid Fiscal Q3 Earnings Put These ETFs in Focus).
FXI
This fund seeks long-term growth by tracking the investment returns, before fees and expenses, of the FTSE China 50 Index. It comprises 50 holdings. The fund’s AUM is $4.01 billion and expense ratio is 0.74% (read: Top Foreign ETFs of 2020 That Are Up At Least 40%).
ASHR
This fund tracks the CSI 300 Index. It comprises 298 holdings. The fund’s AUM is $2.67 billion and expense ratio, 0.65%.
GXC
The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P China BMI Index. It comprises 820 holdings. The fund’s AUM is $1.90 billion and expense ratio is 0.59% (read: ETFs in Focus on Alibaba's Strong Fiscal Q2 Earnings).
CNYA
The fund tracks the MSCI China A Inclusion Index. It comprises 470 holdings. The fund’s AUM is $674.6 million and expense ratio is 0.60%.
PGJ
This fund follows the NASDAQ Golden Dragon China Index, which offers exposure to the U.S. exchange-listed companies headquartered or incorporated in the People’s Republic of China. It holds a basket of 70 stocks. The product has an AUM of $351.7 million and charges 70 basis points in annual fees.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>