iShares China Large-Cap ETF

FXI

Market cap $6.22B

Beijing is turning out to be one of the biggest winners from the Supreme Court's ruling against many of President Donald Trump's levies.

I reiterate a Buy rating on the iShares China Large-Cap ETF, citing compelling valuation and bullish technical momentum. FXI trades at a blended P/E of 13.27 versus SPY's 24.43 and yields 2.37%, reflecting both value and geopolitical risk. The recent Supreme Court tariff ruling triggered a bullish key reversal in FXI, highlighting resilience amid U.S.-China trade policy uncertainty.

China ETFs enter the Year of the Horse with cheap valuations, AI momentum and policy support, but property woes, weak consumption and geopolitics may keep volatility elevated.

Hong Kong-listed Zhipu AI — that trades as Knowledge Atlas Technology — surged 30%. MiniMax saw shares in Hong Kong jump 11%.

Kevin Sneader, President of APAC ex‑Japan at Goldman Sachs, speaks with CNBC's Emily Tan on the sidelines of the 19th Asian Financial Forum. He points to investor appetite for AI driving flows into Asian markets, while noting key nuances for standouts such as China and South Korea.

I upgraded iShares China Large-Cap ETF to Buy, citing robust local capital flows and policy support. FXI offers over 22% consensus upside and a 2% dividend yield, with key holdings out-yielding local deposits and bonds. Portfolio EPS growth is projected at 11% for 2026 and 15% for 2027, with a YE26 PE of 13x, yielding an attractive PEG of 1x.

A surge in exports powered China's growth last year, defying expectations that a trade war with the U.S. would hobble the world's second-biggest economy. China's gross domestic product expanded 5% last year when adjusted for deflation, according to data released Monday by the country's National Bureau of Statistics. That met Beijing's official growth target and is in line with the 5% real GDP growth notched in 2024.

GDP grew 4.5% in the October to December period. Full-year economic output came in at 5%, meeting the official target of around 5%.

China posted a record trade surplus for 2025, as fresh data showed the world's second-largest economy remained resilient despite facing steep tariffs from the Trump administration.

Morgan Stanley's Laura Wang says China equities are entering a phase of stabilization after a strong 2025, with future gains driven more by earnings growth than valuation expansion. She highlights AI, innovation and high-tech manufacturing as core themes, stresses the importance of stock selection and dividend income, and says global investor interest in China is returning - with room for further allocation in 2026.