A recent projection from the United Nations Trade and Development Report paints a positive picture for China investing. While significant concerns continue to beguile the U.S. economy as well as the European economy, China growth may appeal. The report sees the country growing 12 times faster this year and outpacing the continent again next year. Amid slowing overall growth, China stands out as a potential bright spot.
China looks set for 4.8% growth in 2024 per the report, second only to India, which is still developing its more advanced sectors. While U.S. investors have already faced headwinds from rising rates and the potential of a recession down the line, a broader global slowdown should also push those investors to consider diversifying abroad.
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That report comes just as China hits its “National Day Golden Week,” which normally begins around October 1. Golden Week has seen “daily average consumption scale of service retail in China” increase 153% compared to the same period in 2019. That activity suggests that, while significant savings could somewhat restrict consumer spending, spending remains robust. Those and other factors around China growth may invite investors to take a closer look at China ETFs.
China Growth ETF KBA’s Approach
Investors can consider, for example, the KraneShares Bosera MSCI China A 50 Connect Index ETF (KBA) could appeal. The fund tracks the MSCI China A Index, which includes market-cap-weighted large- and mid-cap Chinese equities listed in Shanghai and Shenzhen. Two of the largest stocks from each GICS sector are included in the index, with the ETF eventually hitting about 50 stocks.
KBA has returned 15% over the last year. The strategy holds all sorts of major China firms, with finance, consumer nondurables, and producer manufacturing among the top sectors. For those looking for a broad play China ETF to benefit from China growth next year, keep an eye on KBA.
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