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U.S. Asset Managers Launch New Funds, Eyeing Recovery in China’s Markets

Posted on February 21, 2024
Writer: James Miller


Despite facing three years of market downturns and geopolitical tensions, U.S. asset managers are gearing up for a recovery in China’s markets by launching new investment products. They are betting on a rebound, encouraged by lower stock valuations in China compared to the U.S.

China’s financial markets have struggled due to a property crisis, slower economic growth, and tensions with the U.S., leading to significant investment outflows. Yet, these challenges have not deterred U.S. firms from focusing on the potential for high returns. 

The CSI 300 Index, a major Chinese stock market index, has seen a 43% drop from its peak three years ago but trades at more attractive valuations compared to its American counterpart, the S&P 500. This discrepancy highlights the opportunity U.S. asset managers see in the Chinese market.

Companies like KraneShares are actively introducing China-focused exchange-traded funds (ETFs), betting on the market’s recovery. 

KraneShares CEO Jonathan Krane said, “This is potentially a once-in-a-lifetime opportunity to buy China equities at valuation levels not seen for a long time.”

Despite the risks, these firms believe the size and growth potential of China’s economy make it an essential part of investors’ portfolios. 

For more detailed insights into this trend, read the full article on Reuters.

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