Franklin FTSE China ETF

FLCH

Börsenwert 287 Mio. $

The Franklin FTSE China ETF is upgraded to BUY, driven by attractive valuations and a favorable risk/reward profile. FLCH trades at a forward P/E of 10.8–11.2x, according to my calculations, a 7% discount to its 10-year average. The Trump-Xi summit and renegotiation of the Busan truce present, in my opinion, a concrete near-term catalyst for FLCH.

China's vast industrial overcapacity and weak domestic consumption threaten global economic balance and may trigger rising protectionism. Record-breaking Chinese exports face mounting global pushback, increasing risks for investors in China, especially in industrial sectors.

Charles Kupchan, Council on Foreign Relations senior fellow, joins 'The Exchange' to discuss the Iran war, tariffs and much more.

CNBC's Eunice Yoon joins 'Money Movers' to discuss President Trump's threat to add high Chinese tariffs, the Iran war and the failed ceasefire deal.

Franklin FTSE China ETF (FLCH) offers cost-efficient, diversified exposure to China's evolving high-tech and industrial sectors. FLCH benefits from catalysts like easing US-China trade tensions, supportive PBOC policy, and China's 15th Five-Year Plan prioritizing advanced industries. Despite attractive valuations—FLCH trades at a 13.85x P/E versus higher global peers—significant geopolitical, regulatory, and property sector risks persist.

Mainland investors were rare net sellers of Hong Kong-listed stocks overnight, a rare occurrence these days, totaling about $160 million. China YTD retail sales growth was stronger than expected.

FLCH, the most cost-efficient Chinese ETF around, has outperformed non-Chinese EMs and global markets by 2x since we last covered it. FLCH's largest sector, Chinese consumer discretionary, stands to benefit from rising consumer confidence readings (currently at 30-month highs) and anticipated 2026 fiscal and monetary stimulus. Despite concerns over higher tariffs, China continues to mitigate pressures on the trade front very comfortably, with the trade surplus crossing the $1 trillion mark.

Easing tensions between China and the U.S. may be supportive of markets. Still uncertainty amid plans for Trump to visit China in 2026.

Despite mounting macro headwinds at the start of the year, Chinese equities have continued to deliver positive performance. While near-term flows can provide further upside, the durability for the equity rally will hinge on policy choices ahead.

Getting emerging market exposure is a viable option in the current market environment. That's especially so given the global de-dollarization and prospect of further rate cuts by the Federal Reserve.