Investors have plunged back into Chinese-focused ETFs shaking off concerns over tariffs, geopolitics and delisting.
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China is Backed
New data from LSEG Lipper has revealed that global investors bought a combined $401.7 million in four major U.S.-listed China ETFs in the month through May 15, compared with a $3.8 billion outflow in April.
Indeed, April marked the second largest outflow on record with the worst coming in November 2024.
The iShares MSCI China ETF (MCHI) whose top 10 holdings include technology group Tencent (TCEHY) and EV maker BYD (BYDDY) was one of the recipients. Its share price is up 3% over the last three months.
The iShares China Large-Cap ETF (FXI) and the KraneShares CSI China Internet ETF (KWEB), whose holdings include Alibaba (BABA) also performed well. The Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) was another winner. It tracks the performance of the CSI 300 Index, which encompasses the top 300 stocks traded on the Shanghai and Shenzhen exchanges. Its shares have climbed 2% over the last three months.
According to Goldman Sachs (GS), U.S. institutional investors own $250 billion in U.S.-listed Chinese stocks at present.
The future of those assets and indeed the attractiveness of investing in Chinese-focused ETFs and stocks has been called into question in recent months.
U.S. Jitters
That’s down to President Trump’s tariffs policy which slapped a huge 145% rate – since reduced – on Chinese imports into the U.S. as well as rising geopolitical tensions between the world’s two largest economies.
In addition, there were comments from U.S. Treasury Secretary Scott Bessent highlighting the possibility that Chinese stocks could be delisted from U.S. exchanges. That would signal a so-called decoupling of the two economies.
However, progress on a trade deal between the U.S. and China and an easing in tariff tension seems to have buoyed investor hopes. But, caution still seems to be the word.
“The selling pressure in April was mainly due to trade tensions … we have seen some sentiment recovery in May,” said Jason Lui, head of APAC equity and derivative strategy at BNP Paribas, as reported by Reuters.
What are the Best Chinese Stocks to Buy?
We have rounded up the best Chinese stocks to buy using our TipRanks comparison tool.
