{"id":89882,"date":"2024-02-22T07:39:21","date_gmt":"2024-02-22T12:39:21","guid":{"rendered":"https:\/\/ifintechworld.com\/?p=89882"},"modified":"2024-02-22T07:39:21","modified_gmt":"2024-02-22T12:39:21","slug":"china-focused-etfs-struggle-amid-fears-of-another-regulatory-crackdown","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=89882","title":{"rendered":"China-focused ETFs struggle amid fears of another regulatory \u2018crackdown\u2019"},"content":{"rendered":"
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Hi! This week\u2019s ETF Wrap funds looks at China-focused funds that are struggling in 2024, with Clocktower\u2019s chief strategist Marko Papic providing his take on concerns tied to the country.<\/p>\n

Please send feedback and tips to christine.idzelis@marketwatch.com or isabel.wang@marketwatch.com. You can also follow me on X at\u00a0@cidzelis<\/a>\u00a0and find me on\u00a0LinkedIn. Isabel Wang is at\u00a0@Isabelxwang<\/a>.<\/p>\n

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Sign up\u00a0<\/strong>here<\/strong>\u00a0for our weekly ETF Wrap.<\/strong><\/p>\n

It\u2019s a dismal start to the year for several China-focused exchange-traded funds.\u00a0<\/p>\n

Shares of the iShares MSCI China ETF
\n MCHI,<\/span>
\n which has $5 billion of assets under management, have tumbled 9.7% this month through Wednesday, FactSet data show. Like other China ETFs, the fund is struggling after suffering losses in each of the past three years.\u00a0<\/p>\n

Beijing\u2019s financial work conference earlier this week sparked investor fears that a regulatory \u201ccrackdown\u201d on the country\u2019s financial sector is coming, said Marko Papic, chief strategist at Clocktower Group, in a phone interview. The concern is that the Chinese government will be \u201cheavy-handed\u201d in carrying out \u201csignificant regulatory activity\u201d just as China is \u201cin the middle of private-sector deleveraging,\u201d said Papic.<\/p>\n

\u201cWe\u2019ve seen this picture before,\u201d he said, citing the country\u2019s crackdown in 2021 on technology companies. But this time, Papic fears a \u201cdouble whammy,\u201d explaining that regulatory action targeting the financial sector may hurt lending by banks, which are the \u201cblood of the economy.\u201d<\/p>\n

The KraneShares CSI China Internet ETF
\n KWEB,<\/span>
\n also with $5 billion of assets, has seen its shares plunge 11.8% this year through Wednesday, while the iShares China Large-Cap ETF
\n FXI,<\/span>
\n which has $4 billion under management, has dropped 10.7% over the same period, according to FactSet data.<\/p>\n

\u201cEverybody is looking for a reason to buy Chinese stocks because they\u2019re cheap,\u201d said Papic. But the \u201cconstant throwing of regulatory sand in the gears,\u201d he said, \u201cmakes it very difficult for us to tell our clients that there\u2019s any fundamental reason to be bullish\u201d on Chinese assets.<\/p>\n

The iShares MSCI China ETF provides exposure to shares of large and midsize companies in China, while the iShares China Large-Cap ETF focuses on large-cap stocks in the country and the KraneShares CSI China Internet ETF tracks shares of Chinese internet companies listed overseas.<\/p>\n

As for other ETFs that invest in Chinese companies, shares of the Invesco China Technology ETF
\n CQQQ
\n and Invesco Golden Dragon China ETF
\n PGJ
\n have each plummeted more than 13% this month through Wednesday, while the Xtrackers Harvest CSI 300 China A-Shares ETF
\n ASHR
\n dropped 7.5% over the same stretch, according to FactSet data.\u00a0<\/p>\n

As usual, here\u2019s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.<\/p>\n

The good\u2026<\/h2>\n\n\n\n\n\n\n\n\n
\n Top performers<\/strong><\/p>\n<\/td>\n\n %Performance<\/strong><\/p>\n<\/td>\n<\/tr>\n
\n AdvisorShares Pure US Cannabis
\n MSOS\n <\/td>\n		\n 18.0<\/p>\n<\/td>\n<\/tr>\n
\n Sprott Uranium Miners ETF
\n URNM\n <\/td>\n		\n 9.9<\/p>\n<\/td>\n<\/tr>\n
\n Global X Uranium ETF
\n URA\n <\/td>\n		\n 6.3<\/p>\n<\/td>\n<\/tr>\n
\n United States Oil Fund LP
\n USO\n <\/td>\n		\n 2.1<\/p>\n<\/td>\n<\/tr>\n
\n WisdomTree Japan Hedged Equity Fund
\n DXJ\n <\/td>\n		\n 1.2<\/p>\n<\/td>\n<\/tr>\n
\n Source: FactSet data through Wednesday, Jan. 17. Start date Jan. 10. Excludes ETNs and leveraged products. Includes NYSE-, Nasdaq- and Cboe-traded ETFs of $500 million or greater<\/p>\n<\/td>\n\n <\/td>\n<\/tr>\n<\/table>\n

\u2026and the bad<\/h2>\n\n\n\n\n\n\n\n\n
\n Bottom Performers<\/strong><\/p>\n<\/td>\n\n %Performance<\/strong><\/p>\n<\/td>\n<\/tr>\n
\n Invesco Solar ETF
\n TAN\n <\/td>\n		\n -11.1<\/p>\n<\/td>\n<\/tr>\n
\n ARK Genomic Revolution ETF
\n ARKG\n <\/td>\n		\n -10.3<\/p>\n<\/td>\n<\/tr>\n
\n First Trust Nasdaq Clean Edge Green Energy Index Fund
\n QCLN\n <\/td>\n		\n -8.7<\/p>\n<\/td>\n<\/tr>\n
\n Amplify Transformational Data Sharing ETF
\n BLOK\n <\/td>\n		\n -8.6<\/p>\n<\/td>\n<\/tr>\n
\n U.S. Global Jets ETF
\n JETS\n <\/td>\n		\n -7.9<\/p>\n<\/td>\n<\/tr>\n
\n Source: FactSet data <\/p>\n<\/td>\n\n <\/td>\n<\/tr>\n<\/table>\n

New ETFs<\/h2>\n
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  • \n Roundhill Investments said Thursday that it launched the first bitcoin covered call strategy ETF in the U.S., the Roundhill Bitcoin Covered Call Strategy ETF
    \n YBTC.<\/span>
    \n The fund aims to provide investors exposure to an ETF investing in bitcoin futures contracts, while \u201cpotentially generating monthly options income,\u201d according to the announcement. Investors\u2019 exposure to bitcoin, which historically has seen \u201csignificant volatility,\u201d would be subject to an \u201cupside cap,\u201d the firm said.<\/p>\n<\/li>\n
  • \n Calamos Investments announced Jan. 16 that it launched the Calamos CEF Income & Arbitrage ETF
    \n CCEF,<\/span>
    \n an actively managed ETF that seeks to buy \u201cdistribution-producing closed-end funds to deliver high monthly income streams with capital appreciation potential.\u201d\u00a0<\/p>\n<\/li>\n
  • \n F\/m Investments said Jan. 17 that it launched U.S. Credit Series ETFs that track an investible index in investment-grade credit, including the F\/m 2-Year Investment Grade Corporate Bond ETF
    \n ZTWO,<\/span>
    \n F\/m 3-Year Investment Grade Corporate Bond ETF
    \n ZTRE
    \n and F\/m 10-Year Investment Grade Corporate Bond ETF
    \n ZTEN.<\/span><\/p>\n<\/li>\n<\/ul>\n

    Weekly ETF reads<\/h2>\n<\/p><\/div>\n<\/div>\n