First Trust China AlphaDEX Fund

FCA

Market cap $61.1M

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.

Among APAC equity markets, Australia has a higher beta to oil prices while India, Indonesia and Thailand have lower betas. Domestic political uncertainties have been one main reason for the decoupling trend seen in Indonesia and Thailand.

Has the AI trade moved to China? Why Chinese chipmakers may soon change the semiconductor space.

Several hedge funds are pouring money into Chinese equities on the DeepSeek buzz and the potential for the country's policy easing.

Sentiment remains fragile in China and Hong Kong stock market even China services activities have improved in December. Weak market breadth and a persistent bearish trend of the Chinese yuan since November has added to more woes to the Hang Seng Index.

The Politburo of China announced it will now adopt a "moderately loose" monetary policy -- a term China last used in 2010.

China's stimulus plan head lead to big fund flows in ETFs. The trend towards private asset ETFs continues to gain steam.

Data largely came in weaker than already cautious forecasts, and with a less supportive base effect, we will need to see a significant stimulus push to reach this year's growth target. Looking at the output of industrial products, we can see the clear impact of the property market decline play out.

The Shenzhen A shares index, a bellwether of mainland Chinese equities, is down 32 percent from its 2-year high set in February of last year. China's demographic problems begin and end with its dependency ratio - the number of retirees relative to the working population.

Momentum in the Chinese economy has softened in the past few months as pessimism becomes increasingly entrenched.  That suggests further supportive policy measures are needed.