Exhibit 1 plots the relative performance of the MSCI China Index to each of these three, and it isn't a pretty picture. During this 27-year period, the MSCI USA Index compounded at 10.37% annually, the MSCI Emerging Markets Index 7.95%, and the MSCI EAFE Index 6.65%. Chinese stocks' returns were equally or even more disappointing relative to other major markets. Over that same span, the MSCI China Index gained just 2.71% on an annualized basis.
Surely that sort of growth translated to fabulous returns for investors in Chinese stocks, right? Wrong. Where's the Growth?įrom 1993 through 2020, China's gross domestic product grew by more than 9% per year. They may simply decide the risks aren't worth it, or that being more selective-investing in a narrower slice of the market or partnering with an active manager-is best. Investors can't ignore China, but they should be choosy when investing there. So, while opportunities abound, so do risks-big ones. The country's reliance on debt to fuel its growth was again in focus as property developer Evergrande Group edged toward a potential default. The Chinese government continues to exert control over economic activity, as evidenced by its recent efforts to pull the plug on for-profit private tutors. And in 2019, the Shanghai Stock Exchange STAR Market was established as China's equivalent to the Nasdaq: a hub for China's most innovative firms to raise equity capital.īut as much has changed in China, much remains the same.
Some of the world’s largest technology companies, like Tencent ( TCEHY) and Alibaba ( BABA), call China home. The Chinese stock market has also become more dynamic. The inclusion of mainland-listed China A-shares in major index providers' mainline indexes is perhaps the most prominent example of the opening of the Chinese capital market. In recent years, it has opened up to the outside world.
0 kommentar(er)
