China has continued to arouse the interest of European investors at the beginning of the year, after its stock market appreciated more than 27% last year and its debt gained almost 10% thanks to the rise in its price. This favored that, until February, five of the ten best-selling funds and ETFs in the Old Continent have in common that they invest in the Chinese market, according to data from Morningstar. However, the behavior of the Chinese stock market in 2021 is not being positive. Despite the fact that the latest data from the PMI survey of activity in the services sector was the strongest since December, thus dispelling the fear that the recovery of its economy will not be as robust as expected, the CSI 300 is left somewhat more 5% so far this year.
While the best-selling fund is an ETF that seeks opportunities in investment-grade corporate debt from companies that meet ESG criteria, with subscriptions of 4.5 billion euros, the next best-selling vehicle focuses on the Asian country’s debt. This is the BGF China Bond Fund, which attracts 2,500 million euros.
Unlike Chinese equities, which have been negative so far this year, the price of their bonds continues to rise. According to the Bloomberg and Barclays indices, the Asian country’s debt has offered gains of 0.6% since January -it is one of the five large positive categories in a year in which a large part of investors are leaving fixed income for the fear that its low returns will not cover the expected increase in inflation. In addition to this, there is another Chinese debt ETF among the most profitable (iShares China CNY Bond ETF, which captures another 1,800 million euros). .
-the first to enter a crisis due to the pandemic and the first to emerge from it- are still present. “There are reasons to think that this pace of recovery will moderate,” says Louis Luo, Investment Director, Multi-Asset Solutions at Aberdeen Standard Investments. “As the rollout of vaccines accelerates in the US and Europe, we anticipate a slowdown in Chinese exports by the end of the year. We also expect a normalization of fiscal policy.” The expert points out that 2021 could be divided into two parts: “A strong first half, followed by a slowdown in growth momentum as policy makers prioritize sustainable growth and the external environment becomes more difficult.”
technology present
The other theme that is repeated among the best-selling funds in Europe is technology -the Nasdaq 100 continues to rise this year, with a return of more than 8%-. BGF Next Generation Technology and BGF World Technology are among the best sellers.
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