AAGIY - EWH: Unsteady Macros But Still Worth A Look

2024-06-13 08:55:29 ET

Summary

• iShares MSCI Hong Kong ETF has underperformed global stocks, losing -15% of its value in the past year.
• Hong Kong's macroeconomic picture doesn't look too alluring, and its close correlation with Chinese equities is another limiting factor.
• However, Mainland Chinese investors are increasingly turning to Hong Kong equities, boosting overall turnover.
• EWH's top holding- AIA Group with a weight of 22%, could also see some re-rating with sturdy VONB progress, and a pickup in buyback momentum.
• The risk-reward on the long-term charts look attractive, and valuations are not pricey either.

Introduction

The iShares MSCI Hong Kong ETF ( EWH ), a stalwart in the ETF arena with a 26-year listing history, has proven to be a disappointment of sorts, over the past year. EWH which focuses on 29 large-and-mid cap stocks from the Hong Kong Stock market, has contracted by -15%, even as global stocks have notched up healthy gains of +20%....

For further details see: