China makes up a large chunk of the global marketplace, but many investors may be unintentionally underweighting their exposure to the country. With an exchange traded fund, anyone can access a diversified group of Chinese securities.
On the recent webcast, How to Take Advantage of the Expanding Chinese Equity Opportunity, Jared Rowley, research strategist at SSgA, and Matthew Bartolini, research strategist at State Street Global Advisors, point out that the Chinese economy is now the world’s second largest economy and its equity market is the third largest, behind the U.S. and Japan.
However, many remain underexposed to the Chinese market while maintaining their U.S. bias. Consequently, investors could miss out on a significant growth opportunity.
“We believe Emerging Market equities are a broad and evolving asset class and have taken a more prominent position in global equity market,” Rowley said.
According to a recent ETF Trends and RIA Database survey of financial advisors, the majority of respondents point to a 5% to 15% allocation toward the emerging markets.
As the country matures, Beijing has implemented greater reforms to liberalize the market. With more people taking an interest in the emerging market, investors may have noticed that performance and correlations vary among China share classes.