Bringing you live news and features since 2006 

Arrow Funds CEO comments on the China effect for ETF investors

RELATED TOPICS​

Commenting on the US’s negative trade balance with China, Arrow Funds CEO Joe Barrato (pictured), says that this has been growing steadily over the last decade and factors such as growing concerns about China’s high debt levels, asset bubbles, and slowdown in industrial sectors, make this the right time to leverage and demand a balanced traded structure between the two countries, while China still relies on trading with the US.  

In his latest piece, ‘The China Effect’, Barrato further notes that this issue should matter to investors as 79 per cent of most assets invested in international products are highly correlated to China, a fact that many investors are unaware of.
 
“We live in a world where rapidly changing events occur globally on a routine basis. The most recent example: the trade talks between China and the United States. These talks have had an impact on most products (mutual funds and ETFs) that have exposure to the international markets. Over the last week, very few countries have escaped the China effect on their equity markets,” Barrato write.
 
And the recent trade talks between China and the US impacted products such as mutual funds and ETFs that have exposure to the international markets. Barrato recommends that investors should diversify and hold assets, industries and countries that have a low or negative correlation-ones that won’t all move in the same direction at the same time. 
 
And in the cases where investors are looking to diversify away from China, they may consider individual countries that have a low correlation to China or look at packaged solutions that focus on country rotation, global yield or something that has a global macro mandate, he says.
 
“Being properly diversified is like playing defense with your portfolio. Investors should diversify and hold assets, industries and countries that have a low or negative correlation – ones that won’t all move in the same direction at the same time.”

Latest News

BlackRock’s global ETP flows report for June finds a steady rise with USD128.1 billion added to global ETPs in June,..
Morningstar’s global ETF flows report for the first half of 2024 shows that actively managed ETFs have captured 25 per..
The surge in bitcoin ETF launches and funds flowing into the sector is transforming institutional investment in digital assets but..
LSEG Lipper’s latest research finds that the majority of actively managed funds and ETFs globally were not able to beat..

Related Articles

Chris Lo, Columbia Threadneedle
In a recent insight on India by Columbia Threadneedle Investments, the firm reports that the country’s economic reforms, which aim...
With an election on the horizon in the United States a group of ETFs is poised to capture investments on...
Robot worker
Qraft Technologies, based in South Korea, specialises in the use of AI in security selection and portfolio construction....
Andrea Busi, Directa SIM
Romain Thomas talks to Andrea Busi (pictured), CEO of Directa SIM, who explains why the online trading platform has just...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by