Stocks Analysis by Contrarian Outlook (Michael Foster) covering: NVIDIA Corporation, iShares MSCI China ETF, MSCI China, Alibaba Group Holdings Ltd ADR. Read Contrarian Outlook (Michael Foster)'s latest article on Investing.com
—or maybe a biopharma firm that just dropped a breakthrough treatment:, an index fund tracking the Chinese stock market, up to its peak early last week.The gains have attracted the attention of Chinese day traders and speculators, as well as those in the West. But—as is often the case with China’s economic moves—there’s still a lot of uncertainty here, as the Chinese government has given few details on what, exactly, it will do.
Another way to buy in is through an ETF like MCHI, which invests broadly in Chinese assets, and hope you can get out before this short-term frenzy stops. However, MCHI and ETFs like it aren’t your only option, nor are they even a particularly good one.The real problem with Chinese stocks is that, while short-term wins on a frenzy like this are possible, the Chinese market’s long-term performance has been, to put it frankly, dreadful.
That may sound speculative. After all, how can I know that CAF isn’t getting as much attention as MCHI? Well, beyond its lagging performance, there’s the discount to net asset value :Let’s start with the purple line above: MCHI trades at a 0.6% premium to NAV as of this writing. That shouldn’t happen. Typically, market pros look for opportunities to sell an ETF trading at a premium and buy the fund’s underlying assets, as doing so gives them instant profit.
Ishares MSCI China ETF MSCI China Alibaba Group Holdings Ltd ADR
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