Welcome to VanEck
VanEck is a global investment manager with offices around the world. To help you find content that is suitable for your investment needs, please select your country and investor type.
Chinese equities have fallen this year, but the worst could be behind us
The People's Bank of China (PBOC) supply side reforms on Asset Management Products (AMPs) & Wealth Management Products (WMPs) which are considered the “shadow banking” sector have been dampened with amendments to The Guidance on Asset Management Business of Financial Institutions (The Guidance). This should lead to an increase in China’s Total Social Financing (TSF) which is a broad measure of liquidity which The Guidance had a partial effect on the figures close to halving from April to May.
At the same time the original AMPs/WMPs reform came through the US-Sino trade war kicked off, these factors lead to a sell-off in Chinese equities. Close to US$1.6 trillion in value has been wiped off Chinese equities since their peak in January, a fall of ~20% putting it in bear market territory.
The ministry of commerce also recently announced that they will resume talks with the US to try and resolve the current trade war.
Like the trade war, echoing US counter policies, the politburo are now assessing income tax amendments to try and stimulate the economy particularly towards middle income earners. These include tax deductions on mortgage loans and medical expenses.
The announced tax cuts come into effect in January, aligned with the recent easing on AMPs/WMPs, the recent RRR cuts and the next step in the MSCI inclusion in September could see volatility reduce and green return to the CSI 300 chart.
CETF tracks the performance of the CSI 300 which represents the 300 largest and most liquid China A-share stocks listed on the Shenzhen or Shanghai Stock Exchange. CETF is the only A-shares ETF in Australia and it enables Australian investors to access this asset class in a single trade on ASX.
IMPORTANT NOTICE: Issued by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’). VanEck is a wholly owned subsidiary of Van Eck Associates Corporation based in New York, United States. VanEck Vectors ETF Trust ARBN 604 339 808 (the ‘Trust’) is the issuer of shares in the VanEck Vectors ChinaAMC CSI 300 ETF (‘US Fund’). The Trust and the US Fund are regulated by US laws which differ from Australian laws. Trading in the US Fund’s shares on ASX will be settled by CHESS Depositary Interests (‘CDIs’) which are also issued by the Trust. The Trust is organised in the State of Delaware, US. Liability of investors is limited. VanEck Associates serves as the investment adviser to the US Fund. VanEck, on behalf of the Trust, is the authorised intermediary for the offering of CDIs over the US Fund’s shares and issuer in respect of the CDIs and corresponding Fund’s shares traded on ASX.
This is general information only and not financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Investing in international markets has specific risks that are in addition to the typical risks associated with investing in the Australian market. These include currency/foreign exchange fluctuations, ASX trading time differences and changes in foreign laws and tax regulations. Before making an investment decision in relation to the US Fund you should read the PDS and with the assistance of a financial adviser consider if it is appropriate for your circumstances. The PDS is available atwww.vaneck.com.au or by calling 1300 68 38 37.
Past performance is not a reliable indicator of future performance. No member of the VanEck group of companies or the Trust gives any guarantee or assurance as to the repayment of capital, the payment of income, the performance or any particular rate of return from the US Fund.
CETF is subject to elevated risks associated with investments in Chinese securities, including A-shares, which include, among others, political and economic instability, inflation, confiscatory taxation, nationalisation, and expropriation, market volatility, less reliable financial information, differences in accounting, auditing, and financial standards and requirements, and uncertainty of implementation of Chinese law. In addition, CETF is also subject to liquidity and valuation risks, currency risk, non-diversification risk and other risks associated with foreign and emerging markets investments. See the PDS for more information on risks.
CSI 300 Index and its logo are trademarks of China Securities Index Co., Ltd. (‘CSI’) and has been licensed for use by VanEck. The US Fund is not sponsored, endorsed, sold or promoted by CSI, and CSI makes no representation regarding the advisability of investing in the US Fund.