Opinions
Larry Berman CFA, CMT, CTA
BMO CHINA EQUITY INDEX ETF
ZCH-T
COMMENT
Aug 09, 2021
$24.110
Stock price when the opinion was issued
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BUY ON WEAKNESS
A lot of money is unclear on China. China wants to be the biggest economy of the world, as the reserve currency and wants to lead. However, they cannot do this without opening capital markets and letting it thrive. Accumulating every notch down. An opportunity to add every few pullbacks. However, there is limited visibility on the future.
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BUY ON WEAKNESS
China is the second largest economy in the world and will be first in the future. With the tilt towards equalization and communist philosophy. China has some growth challenges with bad demographics that is aging and shrinking. 1.4B people is still a huge number. Be mindful on trimming in rallies. 2-4% would be okay with up to 5% with the next few years. Focus on the China A shares, not the Hong Kong shares.
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TOP PICK
International markets have done extremely well on a relative basis. The Chinese market had been quite depressed for quite some time, now finally started to break out. Very strong in last month or so. This ETF ranks highly in his scoring, looks amazing on the breakout. Capital is moving into Europe and China.
What interests him is that despite all the tariff talk, this ETF is doing incredibly well. Intriguing that Trump is issuing all these threats, yet this ETF is breaking out.
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ZCH is more focused on the tech names with BABA counting for 22% of the holdings. There is virtually no financials. XCH has about 20% banks. Must understand what you own. Internet names have been pounded recently. KWEB could be a good way to play it.