iShares MSCI China ETF

As the month of April draws to a close, here are a few things I've noticed that might not be on everyone's radar:

The dollar continues to show strength, yet the European markets have outperformed the US markets.

A strong dollar is actually bad for the emerging markets, but nobody told the emerging markets that and that's why they ran away from everyone in April, especially China stocks with a Hong Kong listing. $ICHN (-1,95 %)

The A-shares $XCHA (-2,54 %) were somewhat weaker but still stronger than Europe / USA.

Unfortunately, nobody saw this recovery coming...

*cough*(https://getqu.in/diliTw/

https://getqu.in/hidsG0/

https://getqu.in/CyyT6s/ ) *cough*

and the majority are underinvested in the emerging markets in general and China in particular.

😉

Personally, I think there is still room for improvement, sentiment towards China is still extremely poor. Anyone who wanted to sell has probably already done so.

As long as our beloved CCP doesn't screw up again, I see the potential for surprises on the upside.

See you later comrades 🐼🚀🌔

Adding to the ETF portfolio

Always remember, the company's cost of capital is your return!

Fewer investors = more equity per monetary unit

"Often an entire asset class is written off as "dead" even though it's just in the gutter. And when it's in the gutter, it's cheap. John Stepek explains why it often makes sense to buy things that people hate."

The article may be 3.5 years old, but it's still relevant:

https://moneyweek.com/investments/investment-strategy/601575/contrarian-investing-hated-asset-class-buy-emerging-markets

I'll keep buying China if nobody else wants it...

Everyone always says Buy the Dip...

Am I doing that right?

China Limbo, how much further down can we go?

Does anyone remember the articles describing how China will overtake the USA?

https://www.cnbc.com/2021/02/01/new-chart-shows-china-gdp-could-overtake-us-sooner-as-covid-took-its-toll.html

You rarely hear this narrative these days.

In recent years, to the chagrin of all $XMME (+0,35 %)-investors, Chinese shares have come under heavy pressure. In recent weeks, we have seen an accelerated sell-off.

This naturally raises the question for the value investor chad: when is cheap TOO cheap?

Coming from an 18.2 P/E ratio at the beginning of 2021, the market has come back to 7.88 (19 January 2024). This brings us to the same level as insignificant emerging markets without a significant technology sector such as Chile or Austria. 😜

If China were to fall by another 50%, the Chinese market would be between Pakistan and Colombia in terms of its P/E ratio. So there is not much room for downward movement.

Unless some kind of fat tail risk materializes:

Capital market controls by Western countries (as with Russia), expropriation by the CCP or similar.

Such things are currently being priced in, and if they do NOT materialize, we have a lot of upside surprise potential.

What do I do with this information now?

I am currently waiting for a good entry into the $ICHN (-1,95 %) I would prefer a really nice "vomit", a weekly or monthly candle that goes below the lows of October 2022.

Then we wait for a rebound.

What if the rebound doesn't come?

As the position will make up a maximum of 5% of my portfolio, I have no problem holding it for longer. As this is a loading bet, there is also no insolvency risk.

Is this safe money? No!

Does the market have to recover at some point? NO!

But the risk/reward ratio looks really good to me right now.

Comments are now open. Please bear in mind that all statements made here may have an impact on your social credit score.

All hail Winnie the Pooh!

And to fulfill my cultural educational mission, here is some constructive criticism of China from the post-reunification era:

Viki Vomit - Prima in China (1995)

https://youtu.be/ljj8OSodhc0?si=NOyOabP4rjWpyRgR

#china

What do you think of this ETF? 🤔

$ICHN (-1,95 %)

$EIMI (+0,31 %) vs. $EMXC (+1,14 %) + $ICHN (-1,95 %) ? ( #anfänger )

Hello dear community :)

About me:

Since a few months, I (27) also count to the illustrious circle of stock owners and follow with huge interest the many instructive discussions on getquin. Thank you for the many insights!

About my PF:

Besides very small short term investments in single stocks (to satisfy my gambling needs) I invest monthly in ETFs. Here, I would also like to track emerging markets to a certain extent (approx. 20-25%). However, I have been put off by the high proportion of Chinese stocks in mainstream EM ETFs. Personally, I am just not comfortable with around 30% China in the emerging market portion. I would actually like to have less China allocation, manage the allocation flexibly in case the situation improves at some point and also not have to sell the entire EM ETF in case China goes completely belly up....

My (possibly naive) idea was to split off the China portion to be able to manage shares and risks more flexibly. So I currently invest 85% of my EM volume in the $EMXC (EM Ex China)
and 15% in the $ICHN (-1,95 %) (MSCI China). I am aware of many of the "downsides" such as rebalancing expense, slightly higher TER, Taiwan portion remaining in the Ex China ETF. My following question is more about my general ETF understanding.

About my problem/question:

Actually, I assumed that a blend of 70% MSCI EM Ex-China + 30% MSCI China should perform very similar to a common MSCI EM (which usually include 30% China). This is what my splitting logic is based on. However, as you can probably guess now, this is not the case ;-) Especially the $EIMI (+0,31 %) seems to perform differently than this mix now and also in the last years.

Where is the flaw in my logic?

And what are your thoughts and recommendations on flexibly managing China risk in the ETF portfolio?

Would be extremely happy to receive explanations! :)

#etfs
#emergingmarkets
#china
#risk
#newcomer
#hilfe

Sold with a slight plus 😅 and reallocation in $UKW (+1,64 %) clear strategy decision to convert my portfolio to dividend stocks.

I would be interested to know what you think about China? Bullish or Bearish?

Overlge to invest, since this ETF has mainly tech. companies in the portfolio, which fell more in China in 2021, the chances could be good to invest broadly in the upswing.

What do you say?