Xtrackers MSCI All China Equity ETF

CN

Market cap $5.92M

A lot is happening in the China ETF space these days. Product closures, market rallies, and product development are making for an interesting opportunity.

The PBOC held the 1-year medium-term lending facility (MLF) rate at 2.5% in March. The PBOC remains on a dovish tilt, but depreciation pressure on the RMB limits room for monetary easing in China before global central banks start to cut rates.

The week ending March 1 brought 17 new ETFs into the market, including funds from Fidelity, First Trust, Innovator, AllianzIM, YieldMax, Miller Value Partners, and newcomer Regan Capital. DWS also rolled out its first actively managed ETF with the launch of the Xtrackers RREEF Global Natural Resources ETF (NRES) on the Nasdaq.

NEW YORK--(BUSINESS WIRE)--DWS, one of the world's leading asset managers, announced its plans to close the following six U.S.-listed exchange traded funds (ETFs) (the “Funds”) effective March 13, 2024, and to liquidate the Funds effective March 22, 2024: Ticker Fund Name Exchange ASHX Xtrackers MSCI China A Inclusion Equity ETF NYSE Arca CN Xtrackers MSCI All China Equity ETF NYSE Arca DBGR Xtrackers MSCI Germany Hedged Equity ETF NYSE Arca ESCR Xtrackers Bloomberg US Investment Grade Corporat.

China and Hong Kong markets had a humbling 2023 with equities down more than 10%. Beijing has also begun stepping up tourism and travel promotions, granting visa-free entry to 11 countries, with Singapore and Thailand the latest to be included.

China's January CPI inflation was weaker than forecast at -0.8% YoY, which marks the lowest level since September 2009. We expect this to mark the bottom of the current cycle.

Why China May Need To Do More To Boost Investor Confidence

The Chinese economy is stabilising, but the only fireworks will come from the new year celebrations, which begin on February 11, as momentum remains weak. China's GDP growth for the fourth quarter rose from 4.9% year-on-year to 5.2%, bringing 2023 full-year growth to 5.2% YoY, exceeding the 5% growth target set at last year's Two Sessions.

While recent policy announcements and data surprises have generated some optimism, we maintain a cautious stance on China's economic prospects. We believe weak consumption trends, a downbeat labor market and continuing property sector headwinds should all weigh on the economy in the coming quarters.

China's government is finally moving to stimulate the economy after its sluggish post-COVID reopening.