Recent bullishness for CHIX has been accrued against the backdrop of dividend cuts from Chinese banks. Amid rising bad debt, three of China’s four largest banks last week announced payout cuts with one, China Citic Bank Corp., scrapping its dividend altogether, according to Bloomberg. [EM Dividend ETF Bounces Back]
Add to that, pay cuts and restrictions have sparked a spate of executive departures at the Bank of China, Bank of Communications, and China Construction Bank, among others. Bank of China and China Construction are CHIX’s two largest holdings, combining for 19.3% of the ETF’s weight. China Construction Bank and Bank of China combine for 13% of FXI’s weight. [New Highs for China Bank ETF]
Even with the recent surges by China ETFs, investors have not been lured back to FXI as highlighted $188.5 million in outflows from the fund this year through April 9.
Hang Seng Index
Chart Courtesy: Kimble Charting Solution