Embracing China's economic shift through the total China concept

FTSE Russell    Alex Chen, Ph.D., CFA Senior Research Analyst , Christopher Vass, Senior Product Manager
30 Jul 2018
Categories: General Market Analysis, Investment Management, Equity Investments

Country or region: Asia Pacific (Overall)

Summary:
As the mainland China equity market continues to open to overseas investment the ability for international investors to gain access to this large and growing market has become easier.  The questions for international investors are whether they need to include China A shares in their existing China portfolios, and what to do with their existing holdings of overseas China?  This paper highlights that to gain a complete exposure to China equities investors need to diversify across all the different China shares classes.

This article qualifies for 0.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
We encourage CFA Institute members to login to the CE tracking tool to self-document these credits.
 


Abstract

Introduction

  • The China equity market landscape has changed dramatically since FTSE Russell became the first international index provider to launch mainland indexes back in 2001.
  • The number of Chinese listings domestically and abroad has grown rapidly as has its share of emerging market equity portfolios.
  • The problem for international investors is that historically the majority of them have only been able to access China via Hong Kong and overseas listings.
  • As the mainland China equity market continues to open to overseas investment the ability for international investors to gain access to this large and growing market has become easier.
  • Therefore, the questions for international investors are whether they need to include China A shares in their existing China portfolios, and what to do with their existing holdings of overseas China?
  • This paper highlights that to gain a complete exposure to China equities investors need to diversify across all the different China shares classes.
  • The total China concept provides a mechanism to gain access to Chinese listed equities globally and to have diversified sector representation as China continues its development path towards value added manufacturing, and a consumer and service-based economy.



Date of original publication:

05/14/2018


Statistics
Total Views: 5613
Total Downloads: 80

Share Article

Reader Comments

No comments made on this post yet

Note

If you have any copyright and other associated infringements related to this item, please click on the Terms and Conditions link where you will be directed to the Digital Millennium Copyright Act (DCMA) that will outline the procedure for raising your concern.

If you have any concerns with the content of the item [e.g., offensive language and/or material, inappropriate material] then please proceed to utilize the Contact Us form. Remember that when using the Contact Us form, please ensure you reference/cite clearly the item in question (e.g., name of article, author(s) of article) and the nature of the complaint.

Categories