China ETFs are playing pivotal roles in this year’s emerging markets resurgence. One of those funds is the WisdomTree ICBCCS S&P China 500 Fund (NYSEArca: WCHN), which is higher by more than 21%.

The ICBCCS S&P China 500 Fund tries to reflect the performance of the S&P China 500 Index, a group of 500 of the largest, most liquid Chinese companies by market capitalization and one of the only broad-based indices with exposure to all Chinese equity share classes, listed both in mainland China and internationally.

Due to its more diversified exposure to Chinese equity share classes, the fund’s sector weights may also be more diverse, compared to other China-related indices and funds. Specifically, WCHN top sector weights include financials 24.67%, consumer discretionary 16.71% and communication services at 12.44%.

A mix of Chinese stimulus measures have been providing the fodder for economic growth, such as lower taxes, no corporate tax breaks, monetary policy adjustments, and more market access for foreign companies to set up shop. All in all, Wall Street is looking at the Chinese government’s latest efforts as a plus for its economy and a boon for China ETFs.

China Trends

“Fortunately, China’s equity market is currently trading near the steepest discount on a forward P/E ratio basis that we have seen since June 2016,” said WisdomTree in a recent note. “A lower forward P/E ratio on its own could mean very little, but seeing a lower valuation at a time when one is getting ready to possibly capitalize on an improvement in relations between China and the U.S. could make such a strategy more interesting.”

Related: China Tech-Related ETFs Are Among the Top Winners as Trade Talks Continue

Investors appear to be embracing the ideas that the dollar will weaken this year and that the Federal Reserve will slow its pace of interest rate hikes or that no rate increases at all will be delivered in 2019. China’s efforts to stimulate its massive economy also make the case for considering the country’s equity markets.

“It is easy to get wrapped up in the short-term thought processes and headlines that always surround China. The fact is, this is the world’s second largest economy,” according to WisdomTree. “It is a massive market that, even if growth is slowing, is still far outpacing what’s seen in developed markets. There can always be downdrafts, but in our view it’s important to look forward, as the next rally can also be right around the corner.”

For more information on the Chinese markets, visit our China category.

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