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China A-Shares Are Growing in Influence

Second Quarter 2021 

A relative newcomer for investors, China A-shares may be worth a closer look for their diversification and alpha potential.

Insight from our sub-adviser, Schroders Investment Management
Kristjan Mee
Strategist, Research and Analytics

 

Despite their outperformance during the darkest hours of the pandemic, Chinese equities have fallen a bit behind in the first half of 2021. However, their importance for global investors is still on the rise. The share of Chinese equities in global benchmark indices is still relatively low when compared with China's share of global GDP.
 
In our view, the direction of travel is clear: It could be beneficial for investors to increase their exposure to China A-shares now to potentially reap the full benefits, as opposed to waiting for index providers to increase China's weight over time.

 

 

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Important Risks: Investing involves risk, including the possible loss of principal. • Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. These risks may be greater, and include additional risks, for investments in emerging markets or if a fund focuses in a particular geographic region or country, such as China. Diversification does not ensure a profit or protect against a loss in a declining market.

The views expressed herein are those of Schroders Investment Management, are for informational purposes only, and are subject to change based on prevailing market, economic, and other conditions. The views expressed may not reflect the opinions of Hartford Funds or any other sub-adviser to our funds. They should not be construed as research or investment advice nor should they be considered an offer or solicitation to buy or sell any security. This information is current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Schroders Investment Management or Hartford Funds.

 

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