Xtrackers Harvest CSI 300 China A-Shares ETF

ASHR

Market cap $1.54B

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.

The Xtrackers Harvest CSI 300 China A-Shares ETF delivered a strong 22.62% total return over the past year. ASHR's performance was not primarily driven by multiple expansion but by double-digit earnings growth among its holdings. Despite the negative headlines around the country, Chinese companies are advancing rapidly and are taking market share in almost every sector.

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.

Beijing tamped down its GDP growth target this year to a range of 4.5% to 5%, the least ambitious goal on record going back to the early 1990s.

In an interview with the Financial Times Sunday, Trump said he expected China to help unblock the strait before he travels to Beijing for a summit with Chinese leader Xi Jinping. Both sides appeared to increase pressure ahead of the high-stakes summit.

China on Thursday set its GDP growth target for 2026 at 4.5 to 5%. Beijing also reportedly pegged its budget deficit target at "around 4%" of GDP.

Beijing is expected to set GDP growth target at around 4.5% to 5% this year, inflation target unchanged at 2%, budget deficit of 4%. The world's second-largest economy faces persistent challenges at home amid a consumption downturn and prolonged real estate slump.

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

It's been a good year for international equity ETFs. As a category, broad exposure funds tapping into both developed and emerging market equities have delivered outsized gains relative to U.S. markets this year, as well as much sought portfolio diversification.

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.