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China Bedrock Economy

China Bedrock Economy

A multi-factor approach to capture high quality contributors to China's real economy growth

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China A Bedrock

2803 (HKD) | 9803 (USD)

# A-shares# Smart Beta# Multi-factor# Value# LowVol# Size# Quality
China A New Economy

3173 (HKD) | 9173 (USD)

# A-shares# New Economy# NewInfrastructure# 14FYP# QualityGrowth# 2060 net-zero
Premia China STAR50 ETF

3151 (HKD) | 83151 (RMB) | 9151 (USD)

# A-shares# STAR BOARD# Semiconductor# AI# Biotech# 2060 net-zero
Asia Innovative Tech and Metaverse

3181 (HKD) | 9181 (USD)

# Smart EV# AI# Robotics# Automation# 5G# eSports# Semiconductor
Emerging ASEAN Titans

2810 (HKD) | 9810 (USD)

# Vietnam# Thailand# Malaysia# Philippines# Indonesia
MSCI Vietnam

2804 (HKD) | 9804 (USD)

# Supply Chain# Middle Income Class# Consumption Upgrade
China Government Bonds (Unhedged)

2817 (HKD) | 82817 (RMB) | 9817 (USD)

# China Bonds# Long Duration# Government Bonds# RMB# Index Inclusion# USD Hedged
China USD Property Bonds

3001 (HKD) | 83001 (RMB) | 9001 (USD)

# China Bonds# High Yield# USD# Asia Credit
US Treasury Floating Rate (Dis)

3077 (HKD) | 9077 (USD)

# 3-month T bills# One Week Duration# Tax Efficient
China A Bedrock
2803 (HKD) | 9803 (USD)
China A New Economy
3173 (HKD) | 9173 (USD)
Premia China STAR50 ETF
3151 (HKD) | 83151 (RMB) | 9151 (USD)
Asia Innovative Tech and Metaverse
3181 (HKD) | 9181 (USD)
Emerging ASEAN Titans
2810 (HKD) | 9810 (USD)
MSCI Vietnam
2804 (HKD) | 9804 (USD)
China Government Bonds (Unhedged)
2817 (HKD) | 82817 (RMB) | 9817 (USD)
China Government Bonds (USD Hedged)
9177 (USD)
China USD Property Bonds
3001 (HKD) | 83001 (RMB) | 9001 (USD)
US Treasury Floating Rate (Dis)
3077 (HKD) | 9077 (USD)
US Treasury Floating Rate (Acc)
9078 (USD)
US Treasury Floating Rate (Unlisted)

FEATURED INSIGHTS & WEBINAR
premia headline
Extremely negative sentiment culminating Q4 2023 toward Chinese stocks have brought A shares to exceedingly low valuations for an economy with so much inherent growth potential, that it would appear the upside risks far outweigh the downside risks at this point. Meanwhile we see differentiating features of the bedrock and new economy indices including factors tilting toward bargain stocks and high-quality growth at a reasonable price, along with a concentration in strategic sectors that truly drive China’s real economy. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors reviews the factor performance of the onshore A-shares markets in Q4 2023, and reasons why investors may look back at 2024 as a turning point for China’s equity markets, and outstanding entry point for a vintage well positioned for growth recovery in the new normal.
Feb 23, 2024
Extremely negative sentiment culminating Q4 2023 toward Chinese stocks have brought A shares to exceedingly low valuations for an economy with so much inherent growth potential, that it would appear the upside risks far outweigh the downside risks at this point. Meanwhile we see differentiating features of the bedrock and new economy indices including factors tilting toward bargain stocks and high-quality growth at a reasonable price, along with a concentration in strategic sectors that truly drive China’s real economy. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors reviews the factor performance of the onshore A-shares markets in Q4 2023, and reasons why investors may look back at 2024 as a turning point for China’s equity markets, and outstanding entry point for a vintage well positioned for growth recovery in the new normal.
Feb 23, 2024

China data disconnect – reality versus perception
There is a big disconnect between the image of the Chinese economy portrayed by the media and the underlying data. As we start the year, we review key pieces of data from both China and the US. In summary, while the data for China has not been as good as the market may have liked, it was better than what the media would have had us believe. A quick run through the China data for the first nine months of the year, as collated by “China Briefing”: Growth in real GDP 5.2%; industry output 4.0%; services output 6.0%; retail sales 6.8%; fixed asset investment 3.1%. These are very decent growth figures by any international comparison. And China achieved the above figures with a smaller fiscal deficit than the US and while bearing the burden of rebalancing growth away from dependence on the property sector.
Jan 15, 2024
There is a big disconnect between the image of the Chinese economy portrayed by the media and the underlying data. As we start the year, we review key pieces of data from both China and the US. In summary, while the data for China has not been as good as the market may have liked, it was better than what the media would have had us believe. A quick run through the China data for the first nine months of the year, as collated by “China Briefing”: Growth in real GDP 5.2%; industry output 4.0%; services output 6.0%; retail sales 6.8%; fixed asset investment 3.1%. These are very decent growth figures by any international comparison. And China achieved the above figures with a smaller fiscal deficit than the US and while bearing the burden of rebalancing growth away from dependence on the property sector.
Jan 15, 2024

2024 Market Outlook - Part 1: Through the sentiment extremes, cycle change and secular trends
Global markets have hit extremes in sentiment – extreme exuberance towards the US and Japan and extreme pessimism about China. That sentiment has in part been driven by straight line projections of the cycle – the expectation that the US will continue its current path towards “Goldilocks” and Japan can sustain its currency depreciation-led earnings growth. The risks are that the cycle in the US transitions not to “Goldilocks” but to recession, and Japan’s Yen depreciation/reflation cycle cannot be sustained without dangerous inflation and ultimately government debt consequences. For China, the extreme in pessimism is predicated on the assumption that China cannot escape its cyclical weakness of the last 12 months, notwithstanding its ample policy “ammunition”.
Dec 18, 2023
Global markets have hit extremes in sentiment – extreme exuberance towards the US and Japan and extreme pessimism about China. That sentiment has in part been driven by straight line projections of the cycle – the expectation that the US will continue its current path towards “Goldilocks” and Japan can sustain its currency depreciation-led earnings growth. The risks are that the cycle in the US transitions not to “Goldilocks” but to recession, and Japan’s Yen depreciation/reflation cycle cannot be sustained without dangerous inflation and ultimately government debt consequences. For China, the extreme in pessimism is predicated on the assumption that China cannot escape its cyclical weakness of the last 12 months, notwithstanding its ample policy “ammunition”.
Dec 18, 2023

2024 Market Outlook – Part 2: Zoom in on China: Fiscal measures leading the way
Investors should expect a better return in Chinese equities in 2024 after three consecutive negative yearly return. Indeed, it is the first time that China stock market has recorded an annual loss three times in a row. Slowing economy, heighted China-US bilateral relationship, strong dollar and property market slump all contributed to the disappointing performance in the past twelve months. Looking ahead, the market may offer more upside risks because of (1) stronger supportive policies rolling out to help lift economic activities and particularly the property sector, (2) geopolitical tensions tuning down with increasing dialogues between Chinese and US top government officials, (3) domestic long-term investors’ buying and foreign investors’ current significantly underweight position in Chinese equities, and (4) value emerging from the discounted share prices on both absolute and relative basis. Bamboo is a symbol of longevity in China because of its durability, strength, flexibility, and resilience. It survives in the harshest conditions, persevere and still standing tall and staying green year-round. When the storm comes, bamboo bends with the wind. With business and consumer confidence continue to recover amid the much more accommodating, easing environment, Chinese entrepreneurs and the equities market should finally be in for a year of promising growth ahead.
Dec 18, 2023
Investors should expect a better return in Chinese equities in 2024 after three consecutive negative yearly return. Indeed, it is the first time that China stock market has recorded an annual loss three times in a row. Slowing economy, heighted China-US bilateral relationship, strong dollar and property market slump all contributed to the disappointing performance in the past twelve months. Looking ahead, the market may offer more upside risks because of (1) stronger supportive policies rolling out to help lift economic activities and particularly the property sector, (2) geopolitical tensions tuning down with increasing dialogues between Chinese and US top government officials, (3) domestic long-term investors’ buying and foreign investors’ current significantly underweight position in Chinese equities, and (4) value emerging from the discounted share prices on both absolute and relative basis. Bamboo is a symbol of longevity in China because of its durability, strength, flexibility, and resilience. It survives in the harshest conditions, persevere and still standing tall and staying green year-round. When the storm comes, bamboo bends with the wind. With business and consumer confidence continue to recover amid the much more accommodating, easing environment, Chinese entrepreneurs and the equities market should finally be in for a year of promising growth ahead.
Dec 18, 2023

2024 Market Outlook - Part 3:  Emerging ASEAN equities – enjoying faster growth with lower inflation than other EM markets in 2024, and the standout growth story in Vietnam
Emerging ASEAN is one of the most compelling investment stories of 2024 – offering what is now an uncommon combination of growth and undervaluation. Having come to the end of its rate hiking cycle, with economic growth very much intact, Emerging ASEAN now benefits from tailwinds from a cyclical transition to stimulus amidst solid structural growth fundamentals. Vietnam in particular moved early and decisively in 2023 towards stimulus and its market is now favourably positioned with a PE to 2-year earnings CAGR ratio of only 0.36. In this article our Senior Advisor Say Boon Lim and Portfolio Manager Alex Chu discuss more about the fundamental growth drivers for this under-covered region, and how the end of the US rate hike cycle and the current valuation offer attractive opportunities for global and emerging markets allocators looking for uncorrelated alpha.
Dec 18, 2023
Emerging ASEAN is one of the most compelling investment stories of 2024 – offering what is now an uncommon combination of growth and undervaluation. Having come to the end of its rate hiking cycle, with economic growth very much intact, Emerging ASEAN now benefits from tailwinds from a cyclical transition to stimulus amidst solid structural growth fundamentals. Vietnam in particular moved early and decisively in 2023 towards stimulus and its market is now favourably positioned with a PE to 2-year earnings CAGR ratio of only 0.36. In this article our Senior Advisor Say Boon Lim and Portfolio Manager Alex Chu discuss more about the fundamental growth drivers for this under-covered region, and how the end of the US rate hike cycle and the current valuation offer attractive opportunities for global and emerging markets allocators looking for uncorrelated alpha.
Dec 18, 2023

Emerging ASEAN – Fast Track To 2030
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
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Chart of the Week
  • Alex Chu
    Alex Chu

    Director and Portfolio Manager

Chinese long-duration government bonds’ bull run since 2018 shows no signs of cooling in 2024. The momentum will likely continue for the rest of 2024 as China plans to open up its repo markets to overseas investors, and PBOC may cut the policy rates as many as three times this year, according to local brokers’ forecasts. Over the past decade, policymakers have opened up the fixed-income market through the bond and swap connect program. Recently, they vowed to expand foreign access to the onshore repo market, allowing foreign traders to borrow and lend short-term funds using yuan bonds as collateral and gain exposure to CGB using leverage, increasing the foreign holdings of China bonds. On the policy front, the PBOC announced to cut RRR by 50bps, which is a more significant move than the regular practice of a 25bps cut and more than expected. Governor Pan mentioned in his statement that there’s still a gap “between the current price level and the expected price target”, a clear signal that the PBOC is concerned about deflationary pressures raising the market expectation of a cut in February. CITIC Securities even predicts that China needs three rate cuts this year to support the economic recovery. Investors interested in long-duration CGB for capital appreciation or portfolio diversification may look at our Premia China Treasury & Policy Bank Bond Long Duration ETF (2817.HK), which invests in a basket of CGBs and policy bank bonds with ten years or more tenor. We also offer a USD-hedged version (9177.HK) for investors concerned about currency movements.
Feb 8, 2024
FROM OUR PARTNERS
Chart of the Week
  • Alex Chu
    Alex Chu

    Director and Portfolio Manager

Chinese long-duration government bonds’ bull run since 2018 shows no signs of cooling in 2024. The momentum will likely continue for the rest of 2024 as China plans to open up its repo markets to overseas investors, and PBOC may cut the policy rates as many as three times this year, according to local brokers’ forecasts. Over the past decade, policymakers have opened up the fixed-income market through the bond and swap connect program. Recently, they vowed to expand foreign access to the onshore repo market, allowing foreign traders to borrow and lend short-term funds using yuan bonds as collateral and gain exposure to CGB using leverage, increasing the foreign holdings of China bonds. On the policy front, the PBOC announced to cut RRR by 50bps, which is a more significant move than the regular practice of a 25bps cut and more than expected. Governor Pan mentioned in his statement that there’s still a gap “between the current price level and the expected price target”, a clear signal that the PBOC is concerned about deflationary pressures raising the market expectation of a cut in February. CITIC Securities even predicts that China needs three rate cuts this year to support the economic recovery. Investors interested in long-duration CGB for capital appreciation or portfolio diversification may look at our Premia China Treasury & Policy Bank Bond Long Duration ETF (2817.HK), which invests in a basket of CGBs and policy bank bonds with ten years or more tenor. We also offer a USD-hedged version (9177.HK) for investors concerned about currency movements.
Feb 8, 2024
FEATURED INSIGHTS & WEBINAR
premia headline
Extremely negative sentiment culminating Q4 2023 toward Chinese stocks have brought A shares to exceedingly low valuations for an economy with so much inherent growth potential, that it would appear the upside risks far outweigh the downside risks at this point. Meanwhile we see differentiating features of the bedrock and new economy indices including factors tilting toward bargain stocks and high-quality growth at a reasonable price, along with a concentration in strategic sectors that truly drive China’s real economy. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors reviews the factor performance of the onshore A-shares markets in Q4 2023, and reasons why investors may look back at 2024 as a turning point for China’s equity markets, and outstanding entry point for a vintage well positioned for growth recovery in the new normal.
Feb 23, 2024
Extremely negative sentiment culminating Q4 2023 toward Chinese stocks have brought A shares to exceedingly low valuations for an economy with so much inherent growth potential, that it would appear the upside risks far outweigh the downside risks at this point. Meanwhile we see differentiating features of the bedrock and new economy indices including factors tilting toward bargain stocks and high-quality growth at a reasonable price, along with a concentration in strategic sectors that truly drive China’s real economy. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors reviews the factor performance of the onshore A-shares markets in Q4 2023, and reasons why investors may look back at 2024 as a turning point for China’s equity markets, and outstanding entry point for a vintage well positioned for growth recovery in the new normal.
Feb 23, 2024

China data disconnect – reality versus perception
There is a big disconnect between the image of the Chinese economy portrayed by the media and the underlying data. As we start the year, we review key pieces of data from both China and the US. In summary, while the data for China has not been as good as the market may have liked, it was better than what the media would have had us believe. A quick run through the China data for the first nine months of the year, as collated by “China Briefing”: Growth in real GDP 5.2%; industry output 4.0%; services output 6.0%; retail sales 6.8%; fixed asset investment 3.1%. These are very decent growth figures by any international comparison. And China achieved the above figures with a smaller fiscal deficit than the US and while bearing the burden of rebalancing growth away from dependence on the property sector.
Jan 15, 2024
There is a big disconnect between the image of the Chinese economy portrayed by the media and the underlying data. As we start the year, we review key pieces of data from both China and the US. In summary, while the data for China has not been as good as the market may have liked, it was better than what the media would have had us believe. A quick run through the China data for the first nine months of the year, as collated by “China Briefing”: Growth in real GDP 5.2%; industry output 4.0%; services output 6.0%; retail sales 6.8%; fixed asset investment 3.1%. These are very decent growth figures by any international comparison. And China achieved the above figures with a smaller fiscal deficit than the US and while bearing the burden of rebalancing growth away from dependence on the property sector.
Jan 15, 2024

2024 Market Outlook - Part 1: Through the sentiment extremes, cycle change and secular trends
Global markets have hit extremes in sentiment – extreme exuberance towards the US and Japan and extreme pessimism about China. That sentiment has in part been driven by straight line projections of the cycle – the expectation that the US will continue its current path towards “Goldilocks” and Japan can sustain its currency depreciation-led earnings growth. The risks are that the cycle in the US transitions not to “Goldilocks” but to recession, and Japan’s Yen depreciation/reflation cycle cannot be sustained without dangerous inflation and ultimately government debt consequences. For China, the extreme in pessimism is predicated on the assumption that China cannot escape its cyclical weakness of the last 12 months, notwithstanding its ample policy “ammunition”.
Dec 18, 2023
Global markets have hit extremes in sentiment – extreme exuberance towards the US and Japan and extreme pessimism about China. That sentiment has in part been driven by straight line projections of the cycle – the expectation that the US will continue its current path towards “Goldilocks” and Japan can sustain its currency depreciation-led earnings growth. The risks are that the cycle in the US transitions not to “Goldilocks” but to recession, and Japan’s Yen depreciation/reflation cycle cannot be sustained without dangerous inflation and ultimately government debt consequences. For China, the extreme in pessimism is predicated on the assumption that China cannot escape its cyclical weakness of the last 12 months, notwithstanding its ample policy “ammunition”.
Dec 18, 2023

2024 Market Outlook – Part 2: Zoom in on China: Fiscal measures leading the way
Investors should expect a better return in Chinese equities in 2024 after three consecutive negative yearly return. Indeed, it is the first time that China stock market has recorded an annual loss three times in a row. Slowing economy, heighted China-US bilateral relationship, strong dollar and property market slump all contributed to the disappointing performance in the past twelve months. Looking ahead, the market may offer more upside risks because of (1) stronger supportive policies rolling out to help lift economic activities and particularly the property sector, (2) geopolitical tensions tuning down with increasing dialogues between Chinese and US top government officials, (3) domestic long-term investors’ buying and foreign investors’ current significantly underweight position in Chinese equities, and (4) value emerging from the discounted share prices on both absolute and relative basis. Bamboo is a symbol of longevity in China because of its durability, strength, flexibility, and resilience. It survives in the harshest conditions, persevere and still standing tall and staying green year-round. When the storm comes, bamboo bends with the wind. With business and consumer confidence continue to recover amid the much more accommodating, easing environment, Chinese entrepreneurs and the equities market should finally be in for a year of promising growth ahead.
Dec 18, 2023
Investors should expect a better return in Chinese equities in 2024 after three consecutive negative yearly return. Indeed, it is the first time that China stock market has recorded an annual loss three times in a row. Slowing economy, heighted China-US bilateral relationship, strong dollar and property market slump all contributed to the disappointing performance in the past twelve months. Looking ahead, the market may offer more upside risks because of (1) stronger supportive policies rolling out to help lift economic activities and particularly the property sector, (2) geopolitical tensions tuning down with increasing dialogues between Chinese and US top government officials, (3) domestic long-term investors’ buying and foreign investors’ current significantly underweight position in Chinese equities, and (4) value emerging from the discounted share prices on both absolute and relative basis. Bamboo is a symbol of longevity in China because of its durability, strength, flexibility, and resilience. It survives in the harshest conditions, persevere and still standing tall and staying green year-round. When the storm comes, bamboo bends with the wind. With business and consumer confidence continue to recover amid the much more accommodating, easing environment, Chinese entrepreneurs and the equities market should finally be in for a year of promising growth ahead.
Dec 18, 2023

2024 Market Outlook - Part 3:  Emerging ASEAN equities – enjoying faster growth with lower inflation than other EM markets in 2024, and the standout growth story in Vietnam
Emerging ASEAN is one of the most compelling investment stories of 2024 – offering what is now an uncommon combination of growth and undervaluation. Having come to the end of its rate hiking cycle, with economic growth very much intact, Emerging ASEAN now benefits from tailwinds from a cyclical transition to stimulus amidst solid structural growth fundamentals. Vietnam in particular moved early and decisively in 2023 towards stimulus and its market is now favourably positioned with a PE to 2-year earnings CAGR ratio of only 0.36. In this article our Senior Advisor Say Boon Lim and Portfolio Manager Alex Chu discuss more about the fundamental growth drivers for this under-covered region, and how the end of the US rate hike cycle and the current valuation offer attractive opportunities for global and emerging markets allocators looking for uncorrelated alpha.
Dec 18, 2023
Emerging ASEAN is one of the most compelling investment stories of 2024 – offering what is now an uncommon combination of growth and undervaluation. Having come to the end of its rate hiking cycle, with economic growth very much intact, Emerging ASEAN now benefits from tailwinds from a cyclical transition to stimulus amidst solid structural growth fundamentals. Vietnam in particular moved early and decisively in 2023 towards stimulus and its market is now favourably positioned with a PE to 2-year earnings CAGR ratio of only 0.36. In this article our Senior Advisor Say Boon Lim and Portfolio Manager Alex Chu discuss more about the fundamental growth drivers for this under-covered region, and how the end of the US rate hike cycle and the current valuation offer attractive opportunities for global and emerging markets allocators looking for uncorrelated alpha.
Dec 18, 2023

Emerging ASEAN – Fast Track To 2030
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
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