China investments

Alexland

For now we are buying the dip by giving our EM fund this month's pension contribution but that's more of a rebalancing act than any particular vote of confidence in what's going on out there. I am not particularly happy with several aspects of investing in China and although they might be a growth opportunity it might also be possible to run a successful portfolio without them.

Prism

MX5huggy said:

What % of the US stock market is made up of Chinese companies? Because while my FTSE All world is 4.5% China I expect that doesn’t include these US listed companies. https://www.bbc.com/news/business-57979857

That 4.5% should include the US listed companies as the index should look at country of registration rather than country of listing. So Alibaba for example is not included in the S&P 500 but is part of MCSI China

MaxiRobriguez

Alexland said:

For now we are buying the dip by giving our EM fund this month's pension contribution but that's more of a rebalancing act than any particular vote of confidence in what's going on out there. I am not particularly happy with several aspects of investing in China and although they might be a growth opportunity it might also be possible to run a successful portfolio without them.

Developed world tracker would be enough to suit the majority of investors, giving a good return through reasonable diversification.

Absolutely do not "need" China in a portfolio, and thinking about it I might try and reduce my allocation over time as I don't need the large returns that I seek from EM in order to meet my portfolio goals.

Steve182

Chinese mega cap growth shares are now absurdly cheap compared with similar in the US.

JD.com -
Revenue CAGR 32.7%
Forward P/E 22.7

Alibaba -
Revenue CAGR 48%
Forward P/E 18

Tencent -
Revenue CAGR 36.2
Forward P/E 22.8

Amazon -
Revenue CAGR 29.3
Forward P/E 55.5

So all 3 of the above chinese have higher revenue CAGR than Amazon and comparing P/E are all cheap at around 35 to 40% of Amazon's SP.

High risk yes, you take your chances.

Thrugelmir

Steve182 said:

Chinese mega cap growth shares are now absurdly cheap compared with similar in the US.

The alternative view could be that US shares are absurdly overvalued.  No shortage of risks lie ahead for the US mega growth companies. 

eastmidsaver

it really has taken a recent hammering.   not just China,  but also Hong Kong,  and these 2 countries usually take up a good chunk of any Asia or EM sector funds.    i think people may see this as a buying opportunity,  but it could still drop even more due to the current ongoings.....  be interesting to see what happens.

Steve182

Thrugelmir said:

Steve182 said:

Chinese mega cap growth shares are now absurdly cheap compared with similar in the US.

The alternative view could be that US shares are absurdly overvalued.  No shortage of risks lie ahead for the US mega growth companies. 

Fair point, although to my knowledge Amazon's P/E has rarely or never been this low, and has typically been close to 100.

So you could say Amazon are cheap but Chinese even cheaper!

 

Thrugelmir

eastmidsaver said:

it really has taken a recent hammering.   not just China,  but also Hong Kong,  and these 2 countries usually take up a good chunk of any Asia or EM sector funds.    i think people may see this as a buying opportunity,  but it could still drop even more due to the current ongoings.....  be interesting to see what happens.

HK for all intents and purposes is under Chinese control and ultimately will be swallowed up. If you look at the economic geography of Hangzhou Bay. HK makes the perfect base for a major financial centre. 

Steve182

Today, JD.com up 8.5%, Baba up 5.3%, Tencent up 4.8%

The Chinese rollercoaster continues its run!

george4064

I don't have direct exposure, just indirect exposure via my EME IT and Pacific (ex Japan) IT with an overall lookthrough 5.0% exposure to China.

If they don't bounce back within the next week or so, I'd expect August's regular contribution to go into one of those trusts.