GXC ETF

China is facing difficulties in transitioning its economy from manufacturing-driven to high-value goods and services, and government policies have also impacted its growth. The Chinese government has introduced a significant stimulus package, including monetary and fiscal measures, to boost its economy. The stimulus measures have led to a short-term surge in the price of the SPDR S&P China ETF, but the long-term impact remains uncertain.

After years of negative returns, Chinese stocks are back. Backed by a much-improved macro/micro setup, this rally likely still has legs. Funds heavier on offshore listings, like GXC, could outperform from here.

The SPDR S&P China ETF offers exposure to both U.S.-listed ADRs and Chinese A-shares, with a tilt towards large-cap technology companies. GXC is trading at attractive valuations compared to the S&P 500, with a P/E ratio of 10x and estimated EPS growth of 16% for the next 3-5 years. China's economy is maturing, facing new challenges and opportunities.

The SPDR S&P China ETF has performed poorly in 2023, with total returns of -13%. The Chinese economy is expected to have a slow recovery in 2024, with growth expected to come in at 4.6% vs 5.2% in 2023. Consumer dynamics in China remain weak, with low consumer confidence and little inclination to spend, impacting the consumer cyclical stocks which dominate GXC's portfolio.

China's Golden Week produced some surprisingly positive data points. But the structural property overhang hasn't been cleared. Chinese ETFs like GXC screen cheaply but are probably more 'value trap' than 'value'.

U.S. exchange-traded funds that invest in Chinese stocks were trading higher on Friday afternoon, on track for their best day in a month after China ramped up its efforts to support the country's flagging currency as investors' concerns over the economic weakness persist.

Chinese equities have underwhelmed since the reopening boost earlier this year, and the SPDR S&P China ETF hasn't been spared. This week's policy meeting indicated some stimulus is in the pipeline, though not enough to offset the overall growth slowdown. With the Chinese recovery shaping up to be a highly uneven one, the GXC portfolio's focus on consumer/tech plays is probably the right way to go.

China-related exchange-traded funds continued to surge on Tuesday after Beijing pledged to ramp up stronger stimulus measures to bolster the country's stumbling economic recovery, lifting bullish sentiment as foreign investors were injecting more money into Chinese equities despite low growth in the first half of 2023.

China-related exchange-traded funds surged on Monday, after a private sector survey pointed to resilient factory activity, and Chinese electric-vehicle makers reported solid delivery numbers for the month and quarter ending June 30, driving shares of Nio, XPeng and Li Auto higher.