Posted on 15 May 2020
I’m 27 years old, mainly invested in the local market (mostly blue chip stocks and REITs). About 8% of my portfolio consists of StashAway’s higher risk index. I have spare cash to invest (have settled my insurance and emergency fund) hence I’m thinking of investing in either the US or China market. Which would be a better option for long-term investing?
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17 May 2020
Hi, dear Anon, The ETF You mentioned (HK:3169) is a new one (inception 10.05.2018), with a very broad China exposure (FTSE Total China Connect Index), which can be a good thing, and a moderate annual fee TER of 0.40%. The dividend is relatively high (1.46%), but, true, the AUM is too low at this time, so ETF could become closed in the future. To know, what will be the best performing China ETF (or index) is a tough question, there are already diverse China market indices. I feel they differ very much as to their past performance (which could anyway be an erroneous approach to make predictions for the future), when looked upon 10 years versus 5 (or 3) years at www.etf.com (U.S. domiciled ones) and www.justetf.com (european domiciled ones). The bigger / or more successful indices (and you'll find then ETFs for these) are: MSCI China MSCI China A FTSE China FTSE China A50 FTSE China A-H 50 S&P China 500 CSI 300 Shanghai SE50 NASDAQ Golden Dragon China Index Chinext As regarding my own investing style, it is based on the (risky, and possibly erroneous) assumptions, that past ETF performance is somehow correlated to future performance and that the technology sectors are more successful over longterm. But that investing style is not something that I could recommend here to the community, everybody has to weigh the risks and think for herself. (at least my performance doing that was acceptable, I can safely say). Possibly for the novice it is a better idea to stick to a just average China index, which could be Your mentioned one, or MSCI China or CSI 300). As to China technology investing with ETFs, only to mention some interesting developments: My favorite ETF for that sector is CQQQ, and I own it. The other one, which I like very much, but I do not own yet is PGJ (nice name also: 'golden dragon'), seems very worthwile and has already a lot of technology stocks covered. Both are on the higher fee side (0.70%). Then Krane Shares internet ETF 'KWEB' could also be attractive, but tight sector exposure then. Several years before the China 'Chinext' technology stock exchange was built up and some years later regarded as a severe 'flop' (also provoked by bad corporate governance of the companies), but I don't know, recently the index seems to have fared better. But the ETF for that (CNXT) only has a prohibitively small AUM. Then in 2019 a second try to establish a technology focused stock exchange was made with the "Science and Technology Innovation Board – STAR Market". ETF company Krane Shares has already applied (!) for an ETF ticker 'KSTR' for a 'Star Market 50' index, only time will tell what comes out of that ... Good Luck ! I added a chart in my thread here, of the more successful China ETFs (over 10 years where available) and Your mentioned one since inception (so only very short period) just to compare different interesting ones.
19 May 2020
Wow this is of great help! Will DMODD as well. Thanks for taking the time to share your thoughts Frankie!
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