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China may have trouble attracting investors again this year.
ETF Action’s Mike Akins looks at the challenges associated with the country’s ability to generate stock market returns.
“It’s kind of the old saying. Fool me once, shame on me. Fool me twice, shame on me,” the firm’s founding partner told CNBC’s ETF Edge this week. “You have a situation where China’s economy has expanded. The stock market hasn’t gone anywhere. It’s been very volatile. There have been times when it went up a lot but also came down.”
According to Atkins, emerging markets ex-China products are among the largest inflows seen by ETF Action.
“You have a whole new issue that you have to think about when you go into that market,” he said. “Is it worth investing in from a total returns perspective? Or is it really a story of growth in the economy alone, not in real stock market returns?”
David Mann of Franklin Templeton Investments points to another issue for investor hesitation.
“The geopolitical factor with China is definitely on everyone’s mind,” said Mann, the company’s global head of products and capital markets. “China was down last year. It’s down again this year. Investors are probably paying more attention to the political side.”
Hang Seng Index It’s down more than 6% this year and nearly 30% in the last 52 weeks.
