'Shanghai Lockdown Lifted'... Should We Consider Investing in Chinese ETFs?

TIGER China Electric Vehicle SOLACTIVE Tops Trading Volume
Trading Volume Also Concentrated in 'China Hang Seng Tech'
Interpreted as Inflow of Bottom Buying
Shanghai Lockdown Lifted on June 1
Expansion of China ETF Investment Sentiment

As the COVID-19 pandemic subsides and demand for overseas travel increases, the threat of the influx of COVID-19 variants and monkeypox is gradually rising. On the 26th, at the departure hall of Terminal 1 of Incheon International Airport, an airline staff member wearing protective clothing is guiding passengers heading to China. Photo by Moon Honam munonam@

[Asia Economy Reporter Hwang Yoon-joo] Ahead of the lifting of the Shanghai lockdown measures on June 1, trading volume is pouring into exchange-traded funds (ETFs) investing in Chinese electric vehicles and big tech. However, experts advise conservative investment in Chinese ETFs, such as keeping the investment period short, considering the possibility of a COVID-19 resurgence.

According to the Korea Exchange on the 30th, the Chinese ETF with the highest trading volume in a single trading day was ‘TIGER China Electric Vehicle SOLACTIVE,’ recording 58.9 billion KRW. This was followed by TIGER Hang Seng Tech (4.8 billion KRW), KODEX China H Leverage (H) (1.8 billion KRW), and KODEX China Hang Seng Tech (1.1 billion KRW).

Looking at the trading volume over the past three months, TIGER China Electric Vehicle SOLACTIVE (77.6 billion KRW), TIGER China Hang Seng Tech (9 billion KRW), KODEX China Hang Seng Tech (2.5 billion KRW), and KODEX China H Leverage (H) (1.9 billion KRW) ranked in that order.

TIGER China Electric Vehicle SOLACTIVE diversifies investments across the top 20 companies by market capitalization within China’s electric vehicle industry, including battery cells, materials, equipment, and parts. ‘China Hang Seng Tech’ consists of Chinese big tech companies such as Alibaba, Baidu, and BYD.

The reason for the surge in trading volume is interpreted as bargain buying ahead of the lifting of China’s lockdown. The three-month returns of KODEX China H Leverage (H), TIGER China Hang Seng Tech, and KODEX China Hang Seng Tech were sluggish, ranging from -30% to -40%, but their returns have turned positive in the past month. In the case of TIGER China Electric Vehicle SOLACTIVE, the three-month return was 9.79%, indicating that funds are flowing in based on the outlook for the electric vehicle market.

The Chinese government will lift the Shanghai lockdown measures starting June 1. At a briefing the previous day, Wu Qing, Deputy Mayor of Shanghai, announced revisions to quarantine guidelines and work resumption control guidelines, pledging to abolish ‘unreasonable restrictions’ on companies’ work resumption and production.

Currently, the Chinese stock market is considered to be at a low point, and the prevailing opinion is that it is a time to expand buying. Kim Kyung-hwan, a researcher at Hana Financial Investment, analyzed, "As of May, the market capitalization ratio relative to total liquidity in China is the second lowest ever. Considering the future policy direction and the formation of a secondary economic bottom in April-May, this is a point where valuation rebound is possible."