This article was originally published on ETFTrends.com.
Investing overseas requires a lot of strategic planning, especially given the vast array of opportunities. That’s where the assistance of market experts like Luke Oliver, Head of U.S. ETF Capital Markets for DWS help make planning for international investing a lot simpler, particularly if you’re looking at China.
During a media call, Oliver offered his thoughts on how investors can best navigate the international markets given the number of challenges on the horizon, such as slowing global growth. Most recently, the International Monetary Fund (IMF) cut its global growth forecast to the lowest level since the financial crisis, citing the impact of tariffs and a weak outlook for most developed markets.
According to the IMF, the world economy will grow at a 3.3 percent pace, which is 0.2 percent lower versus the initial forecast in January. Nonetheless, strength in leading markets like the U.S. with its healthy labor market are keeping global growth afloat.
“The global picture is still fairly robust,” said Oliver during a media call.
Oliver also cited China as one of the primary reasons for sustaining global growth. Of course, it’s difficult to talk international investing to an investor without mentioning the world’s second largest economy.
In particular, A-Shares represent China's biggest and best equities. Furthermore, they represent pure-play opportunities as China continues to expand access to its markets.
"These are the stocks that are going to be reactive to China policy and China sentiment–most portfolios are missing these,” said Oliver. “It’s a really critical point because you’re missing a lot of these companies and not diversified enough in these companies.”
“A-shares give you a lot more diversification and lot of more exposure to the actual Chinese economy,” said Oliver.
Here are three A-Shares ETFs in pole position:
- Xtrackers CSI 300 China A-Shares ETF (ASHR) --up 32.60 percent: seeks investment results that correspond generally to the performance, before fees and expenses, of the CSI 300 Index. The fund will normally invest at least 80% of its total assets in securities of issuers that comprise the underlying index. The underlying index is designed to reflect the price fluctuation and performance of the China A-Share market and is composed of the 300 largest and most liquid stocks in the China A-Share market. The underlying index includes small-cap, mid-cap, and large-cap stocks.
- Xtrackers CSI 500 China A-Shares Small Cap ETF (ASHS) --up 32.56 percent: seeks investment results that correspond generally to the performance, before fees and expenses, of the CSI 500 Index. The index is designed to reflect the price fluctuation and performance of small-cap companies in the China A-Share market and is composed of the 500 smallest and most liquid stocks in the China A-Share market. Under normal circumstances, the fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in A-Shares of Chinese small-cap issuers or in derivative instruments and other securities that provide investment exposure to A-Shares of Chinese small-cap issuers.
- Xtrackers MSCI China A Inclusion Equity ETF (ASHX) --up 30.80 percent: The investment seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI China A Inclusion Index. The fund will normally invest at least 80% of its total assets in securities (including depositary receipts in respect of such securities) of issuers that comprise the underlying index. The underlying index is designed to track the equity market performance of China A-Shares that are accessible through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program.
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