Danny Dolan (pictured), Managing Director of China Post Global, has commented on the inclusion of China’s A-shares in the MSCI EM index.
Dolan writes: “China is a long-term megatrend. International investors have noticed the country’s ever-growing importance to the global economy and are increasingly keen to benefit from China’s ongoing strong growth. The MSCI inclusion is a further concrete step in the ongoing opening up of the Chinese stock market and reflects the strong demand from international investors as well as the greatly-improved access.
“It is worth noting that volatility and leverage are still a concern for many international investors. We believe a selective approach such as smart beta can mitigate both concerns considerably. Given the relative lack of international familiarity with the Chinese market, we see stronger demand among international investors for diversified and innovative China funds than for individual A shares at this point.”