KBND - Is China Coming Back With A Bang?
2024-02-07 18:49:00 ET
Summary
- Chinese equities are extremely cheap and priced for bad news. We believe this environment may present opportunities for active managers.
- Valuation-focused and contrarian, opportunistic managers are rotating into China, focusing on beaten-down internet platforms and domestic consumer-oriented plays within travel, tourism and premium domestic brands linked to discretionary spending.
- Some active managers believe that the political leadership’s focus on the economy and stock market could be the catalyst for a potential turnaround.
Chinese equities were one of the bigger laggards of 2023, with the MSCI China Index down 11% while the MSCI All Country World Index was up 23%. Taking a longer time horizon, Chinese equities (using the MSCI China Index) have underperformed developed market equities (using the MSCI World Index) by 65% since the end of 2010....
Is China Coming Back With A Bang?