Tag Archives: China A-Shares
China Equities Diverge from Developed and Emerging Markets
China, the world’s second-largest market by both GDP and stock market capitalization, is showing itself to be a worthy diversifier, with low correlations to other equity markets. While many developed and emerging stock market indices have traded more in sync since the onset of the COVID-19 pandemic, China has performed differently, with both domestic China…
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From COVID-19 to U.S.-China Tensions, What to Expect Next for Chinese Equities
On May 29, 2020, I joined S&P Global’s The Essential Podcast, “A View to the Future – China Beyond the Pandemic,” to discuss the Chinese equity market’s performance and the macroeconomic trends during and beyond the COVID-19 pandemic. This blog includes some key highlights we discussed, along with the related index performance observed in the…
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How the Chinese Equity Market Responded to the Domestic and Global Coronavirus Outbreak
As the coronavirus has spread across continents, countries around the world are experiencing a slowdown in economic activity and volatility in the financial markets. The S&P Pan Asia BMI and S&P 500® lost 20.5% and 20.0%, respectively,[1] in the first quarter of 2020. During the same period, the S&P China A Domestic BMI and S&P…
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China: An Unlikely Stabilizer in Emerging Markets
As investors grapple with the economic fallout of COVID-19 and seek to understand its impact, China has become an unexpected stabilizing force in emerging markets. Despite being the epicenter of the outbreak, Chinese equities have experienced lower volatility, minimal currency fluctuation, and less exposure to falling oil prices in the recent market environment in comparison…
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S&P China 500 Ignores Trade Tensions to End the Year on a High Note
The S&P China 500 advanced 12.9% in Q4 2019, an indication that investors shrugged off U.S.-China trade tensions and signs of a slowing economy. The performance was a reversal from losses during the prior two quarters, which had followed an outstanding 23.6% surge in Q1 2019. The full-year result was a welcome contrast to the…
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What’s Inside the S&P China A-Share Factor Indices? Sector Allocation versus Stock-Selection Effect
After examining the risk factor exposure of the S&P China A-Share Factor Indices in our previous blog, we further explore the sector bias and associated impact on index performance. Apart from the S&P China A-Share Enhanced Value Index, all the S&P China A-Share Factor Indices tended to underweight the Financials sector,[1] though other unique sector…
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What’s inside the S&P China A-Share Factor Indices? The Impact of Style Risk Factors
In our previous blog, our studies indicated that most factor indices in China exhibited distinct return characteristics during up and down markets. To understand the sources that drive differential factor performance, we examined the risk factor exposures and factor impact on the performance of S&P China A-Share Factor Indices[1] based on the Axioma AXCN4-MH China…
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How Does Factor-Based Investing Work in the China A Market?
Factor-based investing has gained popularity in the global investment community. While the long-term risk premia of factors have been evidenced in developed equity markets, some believe the inefficiencies in emerging markets could create better opportunities for factor-based investing. In our recently published paper, “How Smart Beta Strategies Work in the Chinese Market,” we examined the…
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Are You Ready for China A-Share Inclusion?
In case you missed our country classification announcement on Dec. 5, 2018, we will be starting the process of adding China A-shares to S&P DJI global benchmarks (including the S&P China BMI and S&P Emerging BMI) in September 2019 at a partial inclusion factor of 25%. Given the size of China’s onshore equity market, the…
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A Primer on Country Classification in the Context of Saudi Arabia’s Upgrade to Emerging Market Status
Given our recent announcement upgrading Saudi Arabia to emerging market status, it seemed like an apt time to delve a little deeper into the index country classification process and the criteria used to evaluate the status of markets here at S&P Dow Jones Indices (S&P DJI). At the risk of stating the obvious, country classification…
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