7 reasons to stay invested in China equities

30/09/2021
7 reasons to stay invested in China equities

Summary

Although recent news out of China has understandably unsettled the markets, we don’t think it changes the long-term investment case. Volatility goes hand in hand with China’s higher long-term return potential. Understanding the dynamics at play can help make these changes easier to take in stride.

MSCI AC Asia ex Japan Index is an unmanaged index that captures large- and mid-cap representation across two developed-market countries (excluding Japan) and nine emerging-market countries in Asia. MSCI All Country World Index (ACWI) is an unmanaged index designed to represent performance of large- and mid-cap stocks across 23 developed and 24 emerging markets. MSCI China A Onshore Index is an unmanaged index that captures large- and mid-cap representation across China securities listed on the Shanghai and Shenzhen exchanges. MSCI China Index is an unmanaged index that captures large- and mid-cap representation across approximately 85% of the China equity universe. MSCI Emerging Markets Index is an unmanaged index that captures large- and mid-cap representation across 27 emerging-market countries. MSCI Europe Index is an unmanaged index that represents the performance of large and mid-cap equities across 15 developed countries in Europe. MSCI World Index is an unmanaged index that captures large- and mid-cap representation across 23 developed-market countries. Hang Seng Chinese Enterprises Index is an unmanaged, market capitalisation-weighted index tracks the performance of major H-shares (stocks traded on the Hong Kong exchange). Standard & Poor’s 500 Composite Index (S&P 500) is an unmanaged index that is generally representative of the US stock market. TOPIX Index is an unmanaged, market capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. Investors cannot invest directly in an index.

China’s Phase 3: a new chapter in its epic story

11/10/2021
Night skyscraper

Summary

To understand current developments in China, it’s important to see how the country is now emphasising not just economic power, but the “soft” power of persuasion and influence. The key for investors is to learn how and where these strategic priorities will translate into opportunities.

Key takeaways

  • China’s recent clampdowns on the technology and education sectors have unnerved investors, but they don’t distract from the long-term investment case
  • China has entered a new phase – jostling for influence on the global stage, addressing social issues at home, and striving for technology dominance
  • This will take economic power and soft power – and a good place to start would be collaborating with other global powers on climate change solutions

Allianz Global Investors

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