We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The world’s second-largest economy delivered strong first-quarter economic growth despite the COVID-related lockdown slowing down the pace in March. According to the data released by the National Bureau of Statistics, China’s first-quarter GDP jumped 4.8%, surpassing forecasts of a 4.4% rise from a year ago.
Strength was obtained in other economic data as well. There was a 9.3% year-over-year rise in fixed-asset investment during the first quarter, beating projections of an 8.5% rise (according to a CNBC article). Going on, there was a 15.6% year-over-year rise in manufacturing investment in the first quarter along with an 8.5% jump in infrastructure spending. Industrial production also increased 5% in March, surpassing the forecast of a 4.5% rise.
However, not all seems right in China’s economy as it saw weak retail sales data and rising unemployment. Retail sales in China declined 3.5% year over year in March. The decline was more than a 1.6% fall, as predicted by Reuters’ poll of analysts (per a CNBC article). According to official data going back to 2018, the unemployment rate in China touched the highest on record and increased from 5.4% in February to 6% in March across 31 major China cities.
Commenting on the current market conditions, Zhiwei Zhang, chief economist at Pinpoint Asset Management, has said that “This indicates the unemployment problem in the large cities has become more severe than when the Covid Pandemic started in 2020. The Covid outbreaks only forced Shanghai and some other cities to enter lockdowns in late March and early April. Therefore the economic slowdown likely worsened in April,” as stated in a CNBC article.
Following its strict zero-COVID strategy, China has imposed a lockdown in its financial hub, Shanghai. Per the sources, Shanghai accounted for more than 23,500 of the new cases in the world’s second-largest economy.
Considering the ongoing lockdown, market experts are concerned about China’s economic growth. They believe that the move may impact the country’s export growth. Notably, economists at Bank of America have reduced their projections for China’s 2022 GDP growth from 4.8% to 4.2%, in comparison to China’s official GDP growth expectation of around 5.5% for 2022 (per a CNBC article).
China ETFs to Keep a Track on
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 $5.33 billion and expense ratio is 0.74% (read:What Lies Ahead for China ETFs in the Year of Tiger?).
ASHR
This fund tracks the CSI 300 Index. It comprises 310 holdings. The fund’s AUM is $1.73 billion and expense ratio is 0.65%.
GXC
The fund seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P China BMI Index. It comprises 880 holdings. The fund’s AUM is $1.39 billion and expense ratio is 0.59%.
CNYA
The fund tracks the MSCI China A Inclusion Index. It comprises 499 holdings. The fund’s AUM is $799.4 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 83 stocks. The product has AUM of $238.5 million and charges 69 basis points in annual fees (read: 5 ETFs Up 20%+ in S&P 500's Best Week Since November 2020).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Will China ETFs Gain on Strong Q1 GDP Data?
The world’s second-largest economy delivered strong first-quarter economic growth despite the COVID-related lockdown slowing down the pace in March. According to the data released by the National Bureau of Statistics, China’s first-quarter GDP jumped 4.8%, surpassing forecasts of a 4.4% rise from a year ago.
Strength was obtained in other economic data as well. There was a 9.3% year-over-year rise in fixed-asset investment during the first quarter, beating projections of an 8.5% rise (according to a CNBC article). Going on, there was a 15.6% year-over-year rise in manufacturing investment in the first quarter along with an 8.5% jump in infrastructure spending. Industrial production also increased 5% in March, surpassing the forecast of a 4.5% rise.
However, not all seems right in China’s economy as it saw weak retail sales data and rising unemployment. Retail sales in China declined 3.5% year over year in March. The decline was more than a 1.6% fall, as predicted by Reuters’ poll of analysts (per a CNBC article). According to official data going back to 2018, the unemployment rate in China touched the highest on record and increased from 5.4% in February to 6% in March across 31 major China cities.
Commenting on the current market conditions, Zhiwei Zhang, chief economist at Pinpoint Asset Management, has said that “This indicates the unemployment problem in the large cities has become more severe than when the Covid Pandemic started in 2020. The Covid outbreaks only forced Shanghai and some other cities to enter lockdowns in late March and early April. Therefore the economic slowdown likely worsened in April,” as stated in a CNBC article.
Following its strict zero-COVID strategy, China has imposed a lockdown in its financial hub, Shanghai. Per the sources, Shanghai accounted for more than 23,500 of the new cases in the world’s second-largest economy.
Considering the ongoing lockdown, market experts are concerned about China’s economic growth. They believe that the move may impact the country’s export growth. Notably, economists at Bank of America have reduced their projections for China’s 2022 GDP growth from 4.8% to 4.2%, in comparison to China’s official GDP growth expectation of around 5.5% for 2022 (per a CNBC article).
China ETFs to Keep a Track on
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 632 holdings. The fund’s AUM is $6.33 billion and expense ratio is 0.57% (read: After a Painful 2021, Is It Time to Buy China ETFs?).
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 $5.33 billion and expense ratio is 0.74% (read:What Lies Ahead for China ETFs in the Year of Tiger?).
ASHR
This fund tracks the CSI 300 Index. It comprises 310 holdings. The fund’s AUM is $1.73 billion and expense ratio is 0.65%.
GXC
The fund seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P China BMI Index. It comprises 880 holdings. The fund’s AUM is $1.39 billion and expense ratio is 0.59%.
CNYA
The fund tracks the MSCI China A Inclusion Index. It comprises 499 holdings. The fund’s AUM is $799.4 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 83 stocks. The product has AUM of $238.5 million and charges 69 basis points in annual fees (read: 5 ETFs Up 20%+ in S&P 500's Best Week Since November 2020).