CNYA ETF

CNYA offers wide diversification with 433 different A-share positions, but comes with a higher expense ratio of 0.6% and a relatively high P/E ratio of 16.26 compared to H-shares. A-shares often trade at a premium compared to H-shares, leading to lower dividend yields and higher risks, which should be a concern for investors. Despite its diversification and exclusion of ADRs and VIEs, CNYA holds some overpriced assets, making it a decent but not ideal long-term investment.

The American stock market is now twice as expensive as the Chinese based on valuation matrixes. Recent economic developments in China impacting car and real estate markets are most likely temporary setbacks. The risk of poor sentiment from foreign investors towards China remains, but the potential for local investors turning to stocks as opposed to real estate could bolster prices.

iShares MSCI China A ETF offers exposure to China's market, which has potential for growth but also comes with regulatory and volatility risks. CNYA tracks the MSCI China A Inclusion Index and holds diverse holdings in sectors such as Financials, Industrials, and Tech. CNYA has outperformed other similar ETFs focused on China A-shares, but investors should carefully consider fees, holdings, and performance before investing.

CNYA provides access to locally available equities in China, with a focus on financial and industrial sectors. The ETF has exposure to consumer staples and specific companies such as Kweichow Moutai and a lithium-ion battery manufacturer, which may drive secular resilience. But structural risks, including the housing sector and geopolitical tensions, continue to pose challenges for the Chinese economy and the ETF's outlook.

China's President Xi Jinping is preparing the financial industry for ideological training lessons, including sessions on the Long March, to fight corruption and likely gain more control. The country's financial industry needs regulations and control due to poor management of finances by local governments and a 20% youth unemployment rate. Despite lower expectations for growth and a 22% drop in Blackrock iShares MSCI China A ETF over the last year, we maintain a buy stance, expecting China to regain its "animal spirit" in the long term.

Chinese equities have underperformed this year. With more growth challenges on the horizon, caution is warranted. The iShares MSCI China A ETF isn't cheap and could de-rate further.