Tips Tracker: Investing in the new Chinese economy
With the new ETF from fund provider VanEck, one invests only in companies from the following four sectors: consumer and non-consumer goods, healthcare and technology.
The core index contains the 100 companies with the most solid fundamentals that are constantly evaluated for growth, valuation, profitability and cash flow.
from VanEck Vectors New China ESG UCITS ETF (puts the CNEW bar in isincode IE0000H445G8) on the Milan Stock Exchange and Germany’s Xetra, among others, and costing 0.6% year on year. The underlying securities of the MarketGrader New China ESG Index are already bought and then not lent.
The tracker implements an ESG overlay that requires companies to beat the regional average ESG score, as calculated by data provider OWL Analytics. This third-party ESG ratings cover 25,000 companies worldwide and determine business behavior according to 30 ESG criteria, including 12 KPIs, that relate to ESG factors.
The figure below shows the weights of the broader sector of the standard.
The following overview shows 100 stocks in the basket that meet the criteria for OWL Analytics.
China is one of the world’s major economies with the fastest growth rate and has a rapidly expanding middle class. It currently has about 400 million people, which is already more than the total population of the United States. With the growth, the per capita GDP rose dramatically, changing the consumption patterns of the Chinese middle class.
These people spend their money on innovative technologies, healthcare, pharmaceuticals, and consumer and luxury goods. The Chinese economy continues to develop and companies in the country are adapting to the new consumer reality.
The Chinese companies that make up the new economy are expected to outpace the country’s overall growth.
Michael Muir is a director at new money He specializes in Exchange Traded Funds (ETFs). The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.
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