Chinese equities have ripped higher this year, and we see catalysts to support further gains. But not all China exposures are created equal.
It is easy to get wrapped up in the short-term thought processes and headlines that always surround China. There can always be downdrafts, but is the next rally right around the corner?
One of the key debates going into this year has been whether the bloodletting in emerging markets and sharp downdraft in China could turn around in 2019. Here is one smart way to add exposure to China.
Chinese equities currently only account for approximately 3% of global equity benchmarks, despite their companies making up a larger portion of global equity market capitalization. By including a significant portion of A-shares in our emerging market strategies, WisdomTree continues to remain ahead of the opportunity in China.
Does the “global trade war,” quotation marks intentional, spell doom? It depends on your silo. While the mass of investors focus on this issue, few are noting Chinese fiscal expansion or, for that matter, big trade deals being signed right now.
Jeremy J Siegel
Senior Investment Strategy Advisor
CEO of WisdomTree
Jeremy Schwartz, CFA
Executive Vice President, Global Head of Research
Christopher Gannatti, CFA
Head of Research, Europe
Christopher Gannatti began at WisdomTree as a Research Analyst in December 2010, working directly with Jeremy Schwartz, CFA®, Director of Research. In January of 2014, he was promoted to Associate Director of Research where he was responsible to lead different groups of analysts and strategists within the broader Research team at WisdomTree. In February of 2018, Christopher was promoted to Head of Research, Europe, where he will be based out of WisdomTree’s London office and will be responsible for the full WisdomTree research effort within the European market, as well as supporting the UCITs platform globally. Christopher came to WisdomTree from Lord Abbett, where he worked for four and a half years as a Regional Consultant. He received his MBA in Quantitative Finance, Accounting, and Economics from NYU’s Stern School of Business in 2010, and he received his bachelor’s degree from Colgate University in Economics in 2006. Christopher is a holder of the Chartered Financial Analyst designation.
Head of Fixed Income Strategy
Tripp Zimmerman, CFA
Head of Fixed Income & Currency
Associate Director, Asset Allocation and Modern Alpha
Head of Capital Markets
Associate Director of Capital Markets
Head of Europe
Joseph Tenaglia, CFA
Associate Director, Asset Allocation
Kara Marciscano, CFA
Jianing Wu joined WisdomTree as a Research Analyst in October 2018. She is responsible for analyzing market trends and helping support WisdomTree’s research efforts. Previously, Jianing completed internships and projects at Geode Capital, Starwint Capital, and Invesco Great Wall Fund Management with a focus in quantitative research. Jianing received her M.S in Finance from the Massachusetts Institute of Technology. She graduated with honors from Boston College with degrees in Mathematics and Philosophy.
Jeff Weniger, CFA
Director, Asset Allocation
Alejandro Saltiel, CFA
Associate Director of Modern Alpha
Alejandro Saltiel joined WisdomTree as a Quantitative Research Analyst in May 2017. He is responsible for quantitative research on WisdomTree’s products and global equity markets. Prior to joining WisdomTree, Alejandro worked at HSBC Asset Management’s Mexico City office as Portfolio Manager for multi-asset mutual funds. He started his career working at a boutique hedge fund that specialized on trading options on sector-levered ETFs. Alejandro received his Master’s in Financial Engineering degree from Columbia University in 2017 and a Bachelor’s in Engineering degree from the Instituto Tecnológico Autónomo de México (ITAM) in 2010. He is a holder of the Chartered Financial Analyst designation.
Matt Wagner, CFA
Modern Alpha Analyst
Matt Wagner joined WisdomTree in May 2017 as a member of the Research team. He is responsible for research on WisdomTree’s products and communicating the firm’s views on the markets. Matt started his career at Morgan Stanley, working as an analyst in Treasury Capital Markets from 2015 to 2017 where he focused on unsecured funding planning, execution and risk management. Matt graduated from Boston College in 2015 with a B.A. in International Studies with a concentration in Economics. Matt is a holder of the Chartered Financial Analyst designation.
Jeremy Schwartz recently spoke with Jawad Mian, editor of “ Stray Reflections,” and Richard Clarida, global strategic advisor to PIMCO and economics professor at Columbia, regarding their thoughts on policy action by the Federal Reserve (Fed), the Bank of Japan (BOJ) and the European Central Bank (ECB), as well as global implications for investing. Below I outline the key takeaways.
The Fed indicated that in addition to monitoring U.S. employment and U.S. inflation, it would also monitor the economic and financial climate overseas, which I translate as “tribulations emanating from China that can ripple through emerging markets.” Chairman Janet Yellen’s September press conference raises the question, “Will the Fed have any more visibility into what is happening in China by the October or December meetings?”
Over the last six weeks, financial markets have continued to grapple with the current and future implications of the one-day devaluation of the Chinese yuan. While we and other market participants failed to see this move coming, we believe it is important to put this shift in policy in context and attempt to understand what Chinese officials are ultimately aiming to achieve.
For economists, Japan and China appear like a match made in heaven. Where Japan is rich in capital and poor in labor, China’s situation is exactly the reverse. Putting the two together should yield a powerful growth machine. For investors, unfortunately, the Japan-China nexus poses significant complexities.