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Index IDEA: China Deconstructed

Index IDEA: China Deconstructed – Chinese Equity Market Share Classes Exhibit Wide Array of Returns; FTSE Russell

2016 has begun with fresh headlines – and volatility - for Chinese equities, with a disappointing PMI reading, a sharp selloff and  two early market closes impacting global equity market returns to start the new year. Yet recent analysis from FTSE Russell shows that returns across China are not always uniform and very much depend on point of access.

On the first trading day of the year, the FTSE China A50 Index, measuring the largest 50 Chinese stocks trading on mainland China exchanges, fell 5.9%. The FTSE China 50 Index, which measures the largest 50 Chinese stocks trading on Hong Kong exchanges, fell 3.3%. And the FTSE China N Share All Cap Index, which measures Chinese stocks trading on the US NYSE, NASDAQ and NYSE MKT exchanges, fell 4.4%. And for the three and twelve months ended 4 January, these three indexes exhibited an even wider range of results. 

Mat Lystra, Senior Index Research Analyst, FTSE Russell:

“Like many other emerging stock markets, equity returns for China have faced headwinds recently. However, China is also a rapidly evolving and segmented market, reflected in the diversity of access points for investors and the distinct characteristics and return histories of its share classes. Recent China share class performance, while short term in nature, helps to illustrate the potential benefits of having a diversified lens into China and the importance of hiqh quality index tools to provide a complete view of the market.”


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Views expressed by Mat Lystra are as of January 7, 2016, and are subject to change.

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