Back to top

Zacks Podcast Highlights: How to Invest in China with Trump in the White House

Read MoreHide Full Article

For Immediate Release

Chicago, IL – China has been a popular market for investors, but it is always a controversial one. A potentially better way to play the market could be by focusing on the country’s five year plans and seeing what the Chinese government is prioritizing right now. This could be the key to navigating the Chinese market with Trump in the White House, and we explore this topic—and several other China investing related issues—in this week’s Dutram Report. To listen to the podcast, click here: ( )

Investors are usually wrong when it comes to predicting doom and gloom for the Chinese economy. Many had thought that the nation would succumb to an economic crisis in recent years, but China keeps growing at an impressive clip anyway, and it is managing to diversify its economy beyond heavy manufacturing too.

But with the election of Donald Trump, some investors are having doubts regarding Chinese investments again. After all, the rhetoric from the Trump administration—including chief trade adviser Peter Navarro—has been less than friendly (to put it mildly) and some are worried about tensions or worse between the U.S. and China as a result. But is this sort of pessimism warranted?

To get to the bottom of this important question, I spoke with Brendan Ahern, the CIO of KraneShares for this edition of the Dutram Report. His company is a China-focused ETF shop, so he is a top-notch resource for all things investing when it comes to China.

I get his take on the Trump question, as well as what the future holds for Chinese-American relations in the near term. Additionally, we talk about other major risk factors to China and what is going on in the economy right now that investors need to know about.

Beyond Trump

We also go beyond politics though, since the China economic story is much bigger than worries about relations with a single country. In particular, we take a look at the shifting focus of the Chinese government and the idea of their ‘Five-Year Plans’.

These plans tend to be the priorities for the Chinese government and can be indicative of where big investments or help will go towards in the near term. For the latest Five-Year Plan, China is moving towards growth industries further up the value chain, and is trying to shift away from sectors like materials and energy in the process. We talk about what this means for investors, and KraneShares’ approach to tackling these trends with their (KFYP - Free Report)  ETF as well.

Investing in China

KraneShares’ KFYP dives deep into these trends by selecting stocks based on which appear to be important to the government’s most recent Five-Year Plan, while also looking at fundamental factors too. This technique gives investors more of a focus on consumer and technology industries while also running the gambit of different Chinese share classes as well. We also discuss the pros and cons of this more sector-focused approach, which includes allocations to somewhat well-known Chinese companies such as Tencent (TCEHY) or Netease (NTES), and skews away from energy and banking sectors.

This difference is especially important when you consider what the current crop of most popular China ETFs focus on these days. The most popular fund,(FXI - Free Report) , puts close to half of its assets in financials, while we see a 26% weight to this sector in (MCHI - Free Report)  and a 25% weight in (GXC - Free Report) .

Obviously, this makes KFYP’s approach unique, and we go over what this means for investors who are looking for China exposure in today’s climate, as well as a bit about those just seeking a technology play which is something their (KWEB - Free Report)  ETF focuses on. So, make sure to tune in for that, and more, in this week’s podcast.

Bottom Line

China is an economy that cannot be overlooked. And while there could be some rockiness in the next few years, it is hard to bet against continued growth in the nation and a further push towards the diversification of their economy. This could make China ETFs tilted away from industries like banks and energy worth a closer look, making KFYP an especially intriguing choice due to its focus on Five-Year Plans.

So, make sure to listen to this edition of the Dutram Report for a closer look at China and how U.S. investors could play the nation in the near term, as well as the economic focus of the Chinese government right now. And if you have any thoughts or comments, reach us on SoundCloud or at podcast @ for email. We’d love to know what you think of this chat, and if you have any other topics you’d like us to cover in the future too.

But for more news and discussion regarding the world of ETFs, make sure to be on the lookout for the next edition of the Dutram Report , and check out the many other great Zacks podcasts as well!

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 >>

In the interest of full disclosure, KFYP is based on an index run by Zacks Index Services.


About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros .

Follow Eric on Twitter:

Join us on Facebook:

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.