SPDR S&P China ETF

GXC

Market cap $487M

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.

A phone call between U.S. President Donald Trump and Chinese leader Xi Jinping on Friday may have lowered the temperature between the superpowers, but it yielded little in the way of firm agreements and appeared to leave the fate of a TikTok deal unresolved, according to policy experts.

China will continue to rise, but global dominance is unlikely due to significant trade headwinds and growing skepticism from both Western and Asian leaders. SPDR S&P China ETF is rated a Hold, as broad-based exposure faces risks from China's domestic challenges and international trade tensions. SPDR S&P 500 ETF Trust is also a hold, given historically high U.S. valuations and concerns about softening lower-income consumption despite likely Fed rate cuts.

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.

China's Q2 GDP growth met government targets at 5.2% YoY, but the recovery remains uneven beneath the headline numbers. High-tech manufacturing and services are driving growth, while real estate and retail sectors continue to struggle, highlighting structural challenges.

Both U.S. and Chinese stocks rallied due to a de-escalation in the trade war, boosting the S&P 500 and Hang Seng Indexes. I reiterate a 'Buy' rating on the SPDR S&P China ETF due to its attractive valuation and strong dividend yield. GXC has high exposure to large caps and a balanced mix of value, blend, and growth, despite a concentrated allocation in consumer discretionary and communication services.

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

One of the top themes year-to-date has been China-focused technology ETFs. China technology stocks have surged on AI enthusiasm related to China startup DeepSeek's AI model launch.

GXC: China's Industrial Rebound And Stimulus Will Support Momentum In 2025

Trump's tariffs cause short-term volatility, but long-term market impact is minimal; earnings remain the key focus for investors. The three countries in questions are Canada, China, and Mexico. This blog dives into several major companies domiciled in one of those three countries. In the long-term scheme of things the fundamentals of the companies behind these ADRs and stocks are likely to be more deterministic than any geopolitical factors.