Buy low and sell high — it’s an age-old strategy that real estate investors and all investors alike use in order to extract a profit. Right now, real estate tycoons from Hong Kong are salivating at the opportunity in Chinese real estate.
With the Evergrande real estate development crisis in the country’s rearview mirror, investors are looking to pick up property on the cheap. It’s the perfect setup for investors to buy low at the current market and dispose of the property when valuations recover.
“Hong Kong’s property tycoons are swooping in on a rare opportunity to cherry-pick prime land and projects in mainland China as their counterparts there battle a credit crisis,” a Bloomberg report notes.
“The financial hub’s real estate developers are stepping up investments in the mainland, where a government squeeze on leverage and credit-market turmoil have triggered a record wave of defaults, limiting the ability of local builders to buy new land,” the report adds. “Struggling developers such as China Evergrande Group and Shimao Group Holdings Ltd. are also being forced to put treasured assets on sale to alleviate their liquidity squeeze.”
Get It All in 1 ETF
Getting Chinese real estate exposure doesn’t require one to be a tycoon first. Investors can have it all with the Global X MSCI China Real Estate ETF (CHIR).
CHIR seeks to provide investment results that generally correspond to the price and yield performance, before fees and expenses, of the MSCI China Real Estate 10/50 Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in ADRs and GDRs based on the securities in the underlying index.
The underlying index tracks the performance of companies in the MSCI China Index (the “parent index”) classified in the real estate sector, as defined by the index provider. Summarily, ETF investors get the following:
- Targeted exposure: CHIR is a targeted play on the real estate sector in China.
- ETF efficiency: In a single trade, CHIR delivers access to dozens of real estate companies within the MSCI China Index, providing investors an efficient vehicle to express a sector view on China.
- All share exposure: The index incorporates all eligible securities as per MSCI’s Global Investable Market Index.
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