facebookShould I add some exposure to China in my portfolio? Now it's mainly US and Singapore. Seems like China is up and coming! How about India? Please share your thoughts? - Seedly
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Anonymous

Asked on 03 Oct 2020

Should I add some exposure to China in my portfolio? Now it's mainly US and Singapore. Seems like China is up and coming! How about India? Please share your thoughts?

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Hi there,

Several investors, political scientists, and economists had alluded to China being the next superpower. You may read up more from prominent figures like Graham Allison, Kishore Mahbubani, Ray Dalio, and even Warren Buffett. The key drivers are certainly interesting and important to understand if you are keen to invest in China.

I am exposed to China as well, primarily in their Technology sector. However, it has been facing several Intellectual Property and boycott issues with the US and other parts of the World, being coerced by the former.

Nevertheless, China's 1.4 billion population will continue to drive internal consumption, with many millions being lifted out of poverty.

There are some specific industries that I will consider looking into if I were you. Fintech (Ant Financial, WeChat Pay, Alipay), Electric Vehicles (BYD, X-Peng, NIO), Livestreaming (Huya), Ecommerce (Alibaba, JD, Meituan).

I would recommend staying away from Chinese state-owned financial corporations as they are quite complex and complicated to understand. Furthermore, China is known for Shadow-Banking, which is essentially unregulated banking.

These are really mostly Chinese Internet/Tech stocks. For a start, you may want to check out ETFs that approach these strategies. I would recommend either CQQQ, KWEB. A good litmus paper test would be to see through their holdings and try to pick out names that you recognize. Chances are, the more names you recognize, the more prominent their global presence is, alluding to their market power within that business model.

I am not vested in India yet. Even though it is an emerging market, China has far greater growth compared to India in the past few decades. India is still in a huge political rut which I don't see myself taking the country risk. On top of that, innovation and technology are one of the few prominent key drivers which China has built upon itself post-industrialization phase. As for India, they are still in the industrialization phase I believe.

Investing in the US and China need not have to be mutually exclusive. You may still be vested in both countries despite the geopolitical tensions arising from both sides.

Hope I was able to share some insights.​​​

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Frankie Rappaport

Frankie Rappaport

05 Oct 2020

Horrible inflation for India, I'd say: https://www.macrotrends.net/countries/IND/india/inflation-rate-cpi

Gabriel

Gabriel

07 Oct 2020

Thanks for sharing Justin, really insightful! Will be adding China to my portfolio, cheers!

Thank You!
Can you clarify
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Hi,

we all live in our own ideation world.

My private thinking is that China really is upcoming fast as a standard investment. India however not.

Very difficult however how to approach China.

I believe in passive ETF investing and there are quite some followed indices.

As a standard MCHI seems nice, PGJ also, the Wisdom tree ex-state owned was also quite successful.

For my own very technology heavy (spell: risky !) approach

I do love:

CQQQ, KWEB, HK:3067, KURE, HK:2820 and upcoming KSTR

good luck with China !​​​

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Frankie Rappaport

Frankie Rappaport

07 Oct 2020

Hi, dear Gabriel, know that I'm not an advisor nor finance professional. What i do with my own portfolio, that is risky or VERY risky, I could never lightheartedly recommenf to other persons. know your own risk tolerance, and diversify well. total defaults / losses are always possible with investing.

Gabriel

Gabriel

07 Oct 2020

Yes Frankie, totally understand where you're coming from. I'm into long term growth too and I do diversify my portfolio, appreciate the caution. Cheers

Thank You!
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Hi anon, timely question. We just published an article on investing in fast-growing Chinese tech com...

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