Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
Being a huge but emerging economy, China is a much larger part of global stockmarkets and GDP than is reflected in the main global indices. As a result, many institutional investors are structurally underexposed to one of the fastest growing parts of the world.
The inclusion of A-Shares into the main MSCI indices in May is a first step to rectifying this situation, and it means that investors will need to raise their allocations to remain merely neutrally-weighted. However, we believe that there is an opportunity here to get ahead of the curve. This is the first step in a long process, and the opening up of Chinese markets to foreign capital will lead to an increase in liquidity and interest, which means that early investors should be the beneficiaries of a sustained tailwind.
Kepler Trust Intelligence provides research and information for professional and private investors. In order to ensure that we provide you with the right kind of content, and to ensure that the content we provide is compliant, you need to tell us what type of investor you are.Read the full article