[Asia Economy Reporter Hwang Junho] A spring breeze is blowing through Chinese funds. After suffering from adverse factors such as the spread of COVID-19 this year and the resulting bottomless decline in the Chinese stock market, Chinese funds that had recorded negative returns are showing signs of revival.
According to the Korea Exchange on the 20th, among domestic ETFs excluding KODEX200, the TIGER China Electric Vehicle SOLACTIVE ETF, which holds the largest net assets (3.3945 trillion KRW), recorded five consecutive days of gains until the 19th. Except for three trading days this month, it has consistently shown an upward trend. The return rate has risen by 15.27% compared to the closing price on the 19th, the lowest point this month. Although it is still down 23.57% compared to the end of last year, it appears to be in the process of bottoming out after the previous decline.
The main buyers were foreign investors. While individuals and institutions realized profits this month, foreign investors alone poured about 23 billion KRW. Last month, they had net sold about 24.3 billion KRW but have since changed their stance.
Looking at the returns of all ETFs listed on the domestic stock market, Chinese ETFs ranked high. These include TIGER China Clean Energy SOLACTIVE (9.99%), KINDEX China STAR50 on the Growth Enterprise Market (7.49%), and SOL China Emerging Industries Active (5.04%).
The overall return of Chinese funds, including ETFs, fell by 4.02% over the past month. Since the beginning of the year, Chinese funds have plunged by 21.20%.
Kim Jeonghyun, head of the ETF Management Center, said, "Externally, the US tariff issue is also positive, and with economic stimulus measures such as the reduction of China's benchmark interest rate LPR expected to be implemented intensively until June, the market is likely to continue rebounding, especially in policy-related stocks."
Oh Minseok, head of the Global ETF Division at Mirae Asset Asset Management, analyzed, "Due to the lockdown in Shanghai, where most electric vehicle-related companies are concentrated, concerns about deteriorating performance increased, resulting in poor returns, but recently, expectations for the lifting of the lockdown are growing." He added, "If the automobile subsidy policy (to stimulate consumption in provincial cities) is announced early next month, subsidies of 3,000 to 5,000 yuan per vehicle are expected to be provided for cars priced below 150,000 yuan (internal combustion and new energy vehicles)."
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