When it comes to the two largest economies, Covid-19 can’t always have the spotlight. As more economies look to reopen and the U.S. entering a crucial election period, trade talks with China have once again come into the forefront, which should put China-focused exchange-traded funds (ETFs) into the spotlight.
“China is expected to use the upcoming trade talks with the United States as a chance to prevent, or at least slow, a full-fledged confrontation erupting between the world’s two largest economies, analysts said,” a South China Morning post article noted. “Beijing’s commerce ministry said on Thursday the two sides have agreed to talk “in coming days” after US President Donald Trump claimed he postponed discussions on the phase one trade deal because he was unhappy with China’s handling of the coronavirus. The Trump administration, however, has refused to confirm if the talks have been rescheduled.”
“The meeting, even if delayed, is a gesture that bilateral issues can be negotiated and managed,” said Wang Yiwei, a professor of international relations at Renmin University of China.
Investors looking to capitalize on growth opportunities in China can look to the VanEck Vectors China Growth Leaders ETF (GLCN). GLCN seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MarketGrader China All-Cap Growth Leaders Index.
The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index and/or in investments that have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise its benchmark index. The index is comprised of Chinese equity securities which are generally considered by the index provider to exhibit favorable fundamental characteristics according to its proprietary scoring methodology.
For investors looking for additional plays on China, they can give the VanEck Vectors ChinaAMC SME-ChiNext ETF (CNXT) a look. CNXT seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the SME-ChiNext 100 Index.
The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index. The index is a modified, free-float adjusted index intended to track the performance of the 100 largest and most liquid stocks listed and trading on the Small and Medium Enterprise (“SME”) Board and the ChiNext Board of the Shenzhen Stock Exchange. The SME-ChiNext Index is comprised of China A-shares.
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