The emerging markets have been down and out for many years, but they are beginning to come to the forefront as ETF investors look to areas of opportunity in a prolonged bull market environment.
“Two questions investors care about this year,” Jan Van Eck, CEO of VanEck Vectors, said at the Inside ETFs Conference. “Number one is Chinese growth and global growth, and number two, what are central banks doing in the developing markets. Those are the biggest factors that affect all asset classes.”
Van Eck argued that Beijing pulled back on the economy too quickly last year for fear of fueling inflation, which has led to the sudden lack of confidence and subsequent plunge in market prices. However, China is now implementing a type of “drip stimulus” or incremental steps to stimulate the economy.
As a result, investors have witnessed rising momentum in the Chinese markets and related ETFs. For example, the VanEck Vectors ChinaAMC CSI 300 ETF (NYSEArca: PEK) and the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: CNXT) are among the best performing ETFs of the year, surging 31.7% and 40.5% year-to-date, respectively.
“Our view is base case that China growth continues,” Van Eck added.
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