Despite the uniqueness of China’s political system relative to the rest of the world, there is one aspect where the nation can serve as an example to the rest of the world—how it’s handled the reopening of businesses following the COVID-19 pandemic, according to a Goldman Sachs economist.
China has already begun to lift self-quarantine orders just as the rest of the world began to experience a substantial rise in coronavirus cases. Nonetheless, the main takeaway for the world to digest is that a recovery will take time.
“I think there are useful lessons there,” said Andrew Tilton, chief Asia economist at Goldman Sachs.
In terms of sector recoveries, Tilton sees the industrial side of things making a comeback before the service side.
“I think the industrial sector probably comes back before the services side — I think that’s one thing we can probably imagine and see in other places. It’s easier to bring the supply side back there,” he added.
As China’s economy continues to recover from the coronavirus, here are a few funds to consider:
- Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR): seeks investment results that correspond generally to the performance, before fees and expenses, of the CSI 300 Index. The fund will normally invest at least 80% of its total assets in securities of issuers that comprise the underlying index. The underlying index is designed to reflect the price fluctuation and performance of the China A-Share market and is composed of the 300 largest and most liquid stocks in the China A-Share market. The underlying index includes small-cap, mid-cap, and large-cap stocks.
- Xtrackers Harvest CSI 500 China-A Shares Small Cap ETF (ASHS): seeks investment results that correspond generally to the performance, before fees and expenses, of the CSI 500 Index. The index is designed to reflect the price fluctuation and performance of small-cap companies in the China A-Share market and is composed of the 500 smallest and most liquid stocks in the China A-Share market. Under normal circumstances, the fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in A-Shares of Chinese small-cap issuers or in derivative instruments and other securities that provide investment exposure to A-Shares of Chinese small-cap issuers.
- Xtrackers MSCI China A Inclusion Equity ETF (ASHX): seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI China A Inclusion Index. The fund will normally invest at least 80% of its total assets in securities (including depositary receipts in respect of such securities) of issuers that comprise the underlying index. The underlying index is designed to track the equity market performance of China A-Shares that are accessible through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program.
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