If there is good new for CHIX it is that the ETF’s’ valuation is compelling. As in it is extremely low. The current price-to-earnings ratio on CHIX is 6.85 and the ETF trades at less 1x book value, according to Global X data.
The problem for CHIX and its holdings is the assets held by Chinese banks are suffering from worsening quality as the world’s second-largest economy stumbles.
“The market expects the banks to impair at least 30% of their book value – not a surprising assumption because back in early July, Chinese banks provided billions in loans to help fund the bailout entity China Securities Regulatory Commission to prop up the stock market,” reports Barron’s.
Global X China Financials ETF