Back to top

Image: Bigstock

6 China ETFs From 3 Sectors That Emerged Winners in June

Read MoreHide Full Article

The second quarter of 2020 was the best quarter for Wall Street since 1998 despite coronavirus-led lockdowns in various parts of the globe. The unprecedented stimulus measures by global central banks and governments made this possible.

Though the market momentum was especially upbeat in the middle of the quarter, it slackened a bit in June. Rising coronavirus cases with the unlocking of economies disturbed the momentum occasionally in June.

Interestingly, if we screen the top-performing ETFs of June, we will have a host of China ETFs in the top 15 list. These funds come mainly from the technology, healthcare and clean energy segments. Let’s tell you what made these ETFs winners in June.

Technology

The coronavirus-led social distancing trend has given a boost to technology all over the world. People indulged in the work-learn-entertainment-from-home trend. As a result, Chinese Internet and tech ETFs that house stocks like Tencent, Alibaba, JD.Com, Baidu, NetEase soared. These stocks are the Chinese versions of the likes of Google and Amazon. They have a solid presence in cloud too (a soaring industry amid the pandemic).

Global X MSCI China Information Technology ETF (up 23.6%), KraneShares CSI China Internet ETF (KWEB - Free Report) (up 17.7%) and Invesco China Technology ETF (CQQQ - Free Report) (up 16.7%) were the winners in June.

Healthcare

Chinese biotech and pharma companies are benefiting from the push for a coronavirus vaccine. The private Chinese company Sinovac Biotech is testing an inactivated vaccine called CoronaVac. On Jun 13, the company announced that “Phase I/II trials on 743 volunteers found no severe adverse effects and produced an immune response.”  Sinovac Biotech Ltd. has also inked a deal to do final tests in Brazil.

Apart from Sinovac , there are number of companies involved in the vaccine race. CanSino Biological has two candidates in phase 1 and phase 2. China National Biotec Group (CNBG), which is a unit of the state-owned China National Pharmaceutical Group (Sinopharm), has two COVID-19 vaccine candidates in human trials and plans a large-scale Phase 3 human testing in the United Arab Emirates.

So, no wonder, KraneShares MSCI All China Health Care Index ETF (KURE - Free Report) (up 17.9%) and Global X MSCI China Health Care ETF (up 17.2%) won the show in the month.

Clean Energy

China’s target is to shell out $360 billion on renewable energy by 2020 and have renewable energy account for 35% of its electricity consumption by 2030, per Kraneshares. The country has raised its renewable energy generation target for this year to 28.2% of the total, with 10.8% to come from non-hydropower sources. This marks an increment of a modest 0.7 percentage points from 2019. Such diligent focus on clean energy generation made KraneShares MSCI China Environment Index ETF (KGRN - Free Report) (up 19.5%) a winner.

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 >>

Published in