NTree : New research with 150 European institutional investors and wealth managers with a combined AUM of $292.8 billion highlights the positive sentiment towards Chinese equities.
Timothy Harvey, CEO at NTree
Three quarters (75%) expect foreign investment into the asset class to increase in Q1 2021, compared to Q4 of 2020. One fifth expect it to remain the same.
The study was carried out by NTree International Ltd on behalf of investment manager China Post Global, which promotes a family of innovative Exchange-Traded Funds (ETFs) providing access to commodities and emerging markets through its brand Market Access. NTree, which has expertise in investor education and the distribution of ETFs, promotes Market Access ETFs in Europe.
However, there are some mixed views when it comes to the current valuation of Chinese equities. Some 41% of investors said that they represent a fair valuation and 48% felt that they were slightly overvalued and 9% said that they were undervalued.
When looking at the wider market and the most attractive features of investing in Chinese asset classes, 42% said the positive returns from Chinese bonds when many other bonds around the world are providing negative yields were the most important, followed by 30% who said the ‘normal’ economic, monetary, and fiscal policies in China compared to other global economies.
Some 8% cited positive economic indicators in the market as most important, followed by strong capital growth in Chinese equities (7%) and the fact that the Chinese market has become more liquid (7%).
Timothy Harvey, CEO at NTree, comments: “Our research shows the positive sentiment towards Chinese equities this year which is being driven by favourable conditions in the market and the fact that China has sustained relatively normal economic and fiscal policies during the global coronavirus pandemic.”
Danny Dolan, Director at Market Access, commented: “Chinese equities have performed extremely well during the global pandemic, demonstrating again China’s low correlation to other major markets. China’s equity market has risen 30% over the past 12 months and continues to attract investment from overseas institutional investors.”
The Market Access Stoxx® China A Minimum Variance Index UCITS ETF tracks the performance of the Stoxx® China A 900 Minimum Variance Unconstrained AM Index, an onshore-Renminbi denominated index which selects its constituents from the STOXX China A 900 Index, with the aim of reducing volatility.
Market Access ETFs are listed in Frankfurt, Zurich and London.