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China ETFs Keep Sliding as Asian Markets Falter

This article was originally published on ETFTrends.com.

China ETFs continue to feel the downward pressure of trade fears as three of the biggest based on total assets were down after the Asian markets faltered on Monday.

As of 12:00 pm Eastern Time, iShares China Large-Cap ETF (FXI) was down 0.23%, iShares MSCI China ETF (MCHI) was down 0.41% and  KraneShares CSI China Internet ETF (KWEB) was down 0.27%.

The tit-for-tat tariff war between United States and China are getting the majority of the blame as U.S. President Donald Trump's latest threat was to impose an additional round of tariffs on $200 billion worth of Chinese goods. Prior to that, the Trump administration imposed a 25 percent tariff on over $50 billion worth of Chinese goods with the Chinese Commerce Ministry responding with a 25 percent tariff of their own on $34 billion worth of U.S. goods.

As evidenced in the charts below, this back-and-forth has wreaked havoc on FXI and MCHI in particular during the past month.  KWEB is the only ETF in the green, effectively shrugging off the trade war news.



Related: Dow Down 400 Points: Impact of Trade Tensions

Asian Markets Faltering

On Monday, trade concerns continued to drag down the Asian markets with Tokyo ending 0.8 percent lower. In addition, Hong Kong and Shanghai were both off more than one percent and Singapore was down 0.8 percent.

"This trade war could get real and China is likely to be the biggest loser," said Michael Every of Rabobank. "That doesn't mean that anyone emerges unscathed or unbruised or without broken bones."

While China is taking the brunt of the market punishment, other Asian markets are also feeling the pangs of the trade wars as multinational investment bank Morgan Stanley cut its stock index targets for Asian emerging markets.

"It's a complex of many macro factors which we began to be worried about at the tail end of last year," said Jonathan Garner, Morgan Stanley’s chief Asia and emerging market strategist in Hong Kong.

For more news affecting China ETFs, click here.

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