CHIQ ETF

Policy commitments will likely strong in 2025, and it will have a sensitive impact on the equities market. With the current weak allocation of equities by households, a shift in such dynamic driven by policy tailwinds will be impactful. CHIQ benefits from the thematics of domestic consumption focus instead of being geopolitically exposed.

CHIQ invests in large-cap Chinese consumer discretionary stocks, but faces challenges from China's high household debt, housing market issues, and declining population. Despite a short-term boost from a 2024 stimulus package, long-term economic struggles and policy risks persist, impacting consumer confidence and spending. External threats, including potential higher tariffs and restricted access to innovative technologies under the new Trump administration, further weaken China's economic outlook.

U.S. stock indices closed last week on a solid note as investors reacted to a favorable inflation report.

Although a diversified portfolio, CHIQ has many high-quality and high-growth stocks to drive returns through earnings. Market and economic movement are the primary concerns of near-term performance. The overall outlook for CHIQ is fairly balanced considering valuations and the current Chinese economy despite the risks.

Bullish on China's markets due to potential momentum even if the economy doesn't reaccelerate. MSCI China Consumer Discretionary ETF offers exposure to growing middle-class spending on various goods. The fund tracks MSCI China Consumer Discretionary 10/50 Index, providing targeted exposure to the consumer discretionary sector in China.

While the Year of the Rabbit went wrong for the broader Chinese market, the Year of the Dragon may bode well for China ETFs on the back of policy support.

The Global X MSCI China Consumer Discretionary ETF (CHIQ) is an undiscovered ETF with $230 million AUM. Despite concerns about the Chinese consumer, CHIQ offers an opportunity to invest in the uptrend of discretionary spending. CHIQ's portfolio aligns well with areas of consumer spending growth, and it offers a dividend and attractive long-term entry point.

With promising economic data and optimistic growth projections, the Chinese economy stands poised for a potential resurgence in 2024. Explore ETFs to leverage and capitalize on China's anticipated economic revival.

The MSCI China Consumer Discretionary ETF has outperformed broad-based China ETFs. Chinese consumption has held up better than the rest of the economy, and the relative outperformance looks set to continue. Ahead of more China turbulence, targeted consumer exposure via sector-focused funds like CHIQ makes sense.