Author Topic: Is anyone buying China large cap etf  (Read 2419 times)

bthewalls

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Is anyone buying China large cap etf
« on: December 23, 2021, 05:29:19 PM »
Folks
Does anyone dabble in China large cap etfs, for diversity?

Any idea what long term economic forecast is?

Baz

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Re: Is anyone buying China large cap etf
« Reply #1 on: December 23, 2021, 07:35:50 PM »
My EM ETF holds ~37% Chinese stocks and ~58% of the fund is large cap stocks. So I have a bunch of Chinese large cap stocks, but I don't invest in an ETF that specifically targets that niche.

CowboyAndIndian

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Re: Is anyone buying China large cap etf
« Reply #2 on: December 24, 2021, 08:14:20 AM »
I am making sure that I do not have China in my portfolio.

I believe that China is going thru a major financial crisis (real estate bubble, demographics) and are in a similar situation as Japan in 1990. The financials and numbers from China cannot be trusted. I believe that China has peaked and will only drop from here.

I replaced my VWO(emerging markets) with EMXC (emerging markets ex-China).

I have a core ETF portfolio and other than rebalancing every year or so, I do not change the composition. This is the most major change I have done in the portfolio composition in the past 15 years.
« Last Edit: December 24, 2021, 08:20:08 AM by CowboyAndIndian »

Blender Bender

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Re: Is anyone buying China large cap etf
« Reply #3 on: December 24, 2021, 10:38:16 AM »
Even if China would be a good investment, i would not put my $ there to support the system.

Wintergreen78

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Re: Is anyone buying China large cap etf
« Reply #4 on: December 24, 2021, 12:09:31 PM »
I have a target of about 10% of my assets in an emerging market index. The Fidelity EM index is 34% china-based companies. So, Iím at less than 4% exposure to Chinese-based companies.

I donít have any current plans to change my target percentage based on current events.

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Re: Is anyone buying China large cap etf
« Reply #5 on: December 24, 2021, 03:52:00 PM »

Does anyone dabble in China large cap etfs, for diversity?

Yes.  3% VEE allocation (aka VWO), of which 36% is China.  Dabble is an understatement.

Any idea what long term economic forecast is?

No.

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #6 on: December 24, 2021, 05:39:42 PM »
Thanks folks for the opinions

DaTrill

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Re: Is anyone buying China large cap etf
« Reply #7 on: December 28, 2021, 01:34:19 PM »
0%

ChpBstrd

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Re: Is anyone buying China large cap etf
« Reply #8 on: December 30, 2021, 03:32:29 PM »
I hold a small amount of VWO, about 3% of my liquid NW. So I have at least a 1% China allocation plus my exposure inside the US indices.

For the fastest rising stable economy in the world, Chinese stocks have not done well. Just compare FXI to the S&P500. FXI is back where it was 5y ago, while the US market has more than doubled.

If this is the performance when the Chinese economy is growing 6-7% per year, just imagine how bad it will be if growth slows to 3-4% or if a recession occurs. There is something siphoning off the capital created by Chinese companies, so that it never fully makes its way to shareholders. How else could the performance be so bad when economic times have been this good?

Beyond audit issues, secret debts, and reporting issues, I think the Chinese legal system offers little recourse for foreign capitalists who try to come and make a buck there. Chile, Mexico, Thailand, South Africa, and a number of other EMs look a lot better. I also lump Russia, Turkey, Egypt, and Belarus into the "nearly uninvestable" category.

Radagast

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Re: Is anyone buying China large cap etf
« Reply #9 on: December 30, 2021, 08:01:43 PM »
As recently as a year ago I had thought about China. However, the communist party has used COVID to really tighten things up. There is effectively a two month quarantine for all foreign travel which looks likely to last years (1 month upon entering the country, typically 1 month after arriving at your local destination). The popular(government) media and social media have become highly denigrating of non-Chinese people and Chinese people who travel abroad. I see China turning sharply inward, losing any sort of innovative edge it may have had, and becoming varying degrees of hostile and condescending toward outsiders. It benefits those who control the communist party for this to happen, and it matters little what the effect on ordinary Chinese people will be. I perceive that 2008-2019 were the high water mark of current Chinese society, though momentum will keep it moving forward reasonably fast for that long again.

Freedomin5

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Re: Is anyone buying China large cap etf
« Reply #10 on: December 31, 2021, 01:17:01 AM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

As recently as a year ago I had thought about China. However, the communist party has used COVID to really tighten things up. There is effectively a two month quarantine for all foreign travel which looks likely to last years (1 month upon entering the country, typically 1 month after arriving at your local destination). The popular(government) media and social media have become highly denigrating of non-Chinese people and Chinese people who travel abroad. I see China turning sharply inward, losing any sort of innovative edge it may have had, and becoming varying degrees of hostile and condescending toward outsiders. It benefits those who control the communist party for this to happen, and it matters little what the effect on ordinary Chinese people will be. I perceive that 2008-2019 were the high water mark of current Chinese society, though momentum will keep it moving forward reasonably fast for that long again.

The bolded section is incorrect. I live in China and am therefore highly interested in current quarantine requirements as it directly affects me. The requirements are 14-21 days depending on the city, plus maybe another 0-14 days if you are transferring to a different city within the country, depending on the city.

The rest...I can see why you would say that, though the messages are somewhat mixed and rather obtuse.
« Last Edit: December 31, 2021, 01:32:59 AM by Freedomin5 »

vand

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Re: Is anyone buying China large cap etf
« Reply #11 on: December 31, 2021, 07:03:12 AM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

As recently as a year ago I had thought about China. However, the communist party has used COVID to really tighten things up. There is effectively a two month quarantine for all foreign travel which looks likely to last years (1 month upon entering the country, typically 1 month after arriving at your local destination). The popular(government) media and social media have become highly denigrating of non-Chinese people and Chinese people who travel abroad. I see China turning sharply inward, losing any sort of innovative edge it may have had, and becoming varying degrees of hostile and condescending toward outsiders. It benefits those who control the communist party for this to happen, and it matters little what the effect on ordinary Chinese people will be. I perceive that 2008-2019 were the high water mark of current Chinese society, though momentum will keep it moving forward reasonably fast for that long again.

The bolded section is incorrect. I live in China and am therefore highly interested in current quarantine requirements as it directly affects me. The requirements are 14-21 days depending on the city, plus maybe another 0-14 days if you are transferring to a different city within the country, depending on the city.

The rest...I can see why you would say that, though the messages are somewhat mixed and rather obtuse.

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

maizefolk

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Re: Is anyone buying China large cap etf
« Reply #12 on: December 31, 2021, 07:46:50 AM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

I think you're missing the point. It would be more obvious that the performance of a international stock index depends in part of the Chinese economy. The fact that even an index of US domiciled companies has a good chunk of exposure to China should be obvious to most people but frequently people don't realize it, hence the value in pointing it out.

@Freedomin5 I used to go to China but haven't had the chance since the coronavirus started. I similarly used to host a lot of Chinese scientists who traveled to the USA and haven't had the chance since 2019.

Would be really curious in your on the ground take about the messaging going on inside the country about both outsiders and Chinese people who travel outside of China if you are willing to share.

vand

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Re: Is anyone buying China large cap etf
« Reply #13 on: December 31, 2021, 08:16:56 AM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

I think you're missing the point. It would be more obvious that the performance of a international stock index depends in part of the Chinese economy. The fact that even an index of US domiciled companies has a good chunk of exposure to China should be obvious to most people but frequently people don't realize it, hence the value in pointing it out.

@Freedomin5 I used to go to China but haven't had the chance since the coronavirus started. I similarly used to host a lot of Chinese scientists who traveled to the USA and haven't had the chance since 2019.

Would be really curious in your on the ground take about the messaging going on inside the country about both outsiders and Chinese people who travel outside of China if you are willing to share.

Sure, everyone buys and sells stuff to with everyone else today. That's not what OP was asking though, but someone still squeezed in the "VTSAX can be all things to all people, so why bother with new ideas". How brainless and dull.

maizefolk

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Re: Is anyone buying China large cap etf
« Reply #14 on: December 31, 2021, 08:33:59 AM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

I think you're missing the point. It would be more obvious that the performance of a international stock index depends in part of the Chinese economy. The fact that even an index of US domiciled companies has a good chunk of exposure to China should be obvious to most people but frequently people don't realize it, hence the value in pointing it out.

@Freedomin5 I used to go to China but haven't had the chance since the coronavirus started. I similarly used to host a lot of Chinese scientists who traveled to the USA and haven't had the chance since 2019.

Would be really curious in your on the ground take about the messaging going on inside the country about both outsiders and Chinese people who travel outside of China if you are willing to share.

Sure, everyone buys and sells stuff to with everyone else today. That's not what OP was asking though, but someone still squeezed in the "VTSAX can be all things to all people, so why bother with new ideas". How brainless and dull.

Are you just in a bad mood this morning? Or evening I guess for you.

People are posting they they avoid investing in China (whether for political reasons or because they think the economy over is actually in bad shape). It has been pointed out that even if they only buy VTSAX to avoid investing in China, they're still investing in China.

For whatever reason you seem to be reading a lot of other stuff into that (true) observation.

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Re: Is anyone buying China large cap etf
« Reply #15 on: December 31, 2021, 12:20:53 PM »
As recently as a year ago I had thought about China. However, the communist party has used COVID to really tighten things up. There is effectively a two month quarantine for all foreign travel which looks likely to last years (1 month upon entering the country, typically 1 month after arriving at your local destination). The popular(government) media and social media have become highly denigrating of non-Chinese people and Chinese people who travel abroad. I see China turning sharply inward, losing any sort of innovative edge it may have had, and becoming varying degrees of hostile and condescending toward outsiders. It benefits those who control the communist party for this to happen, and it matters little what the effect on ordinary Chinese people will be. I perceive that 2008-2019 were the high water mark of current Chinese society, though momentum will keep it moving forward reasonably fast for that long again.

The bolded section is incorrect. I live in China and am therefore highly interested in current quarantine requirements as it directly affects me. The requirements are 14-21 days depending on the city, plus maybe another 0-14 days if you are transferring to a different city within the country, depending on the city.

The rest...I can see why you would say that, though the messages are somewhat mixed and rather obtuse.
Likewise, I've spent around 2 years in China (though mostly 2009-2010, and none since 2018). We attempted to bring MIL from China to the US throughout 2021, and it is certainly possible, but the excessive quarantine time makes it not worth it. My crowd is I am guessing much more rural and less educated than your crowd, so some of the small villages may enforce a different policy than what you are accustomed to. But also I have been hearing this second hand, and it wouldn't surprise me if those people were also hearing second hand, so I would not be surprised if 2 months was an exaggeration. But it also would not surprise me if it was 5-7 weeks (5 weeks overlapping with your range). Then again, I have heard that Chinese people returning from abroad have had to quarantine for the usual time upon entering, and then get in big trouble after they decide to take a walk after an additional 2 weeks quarantining in the village, so I guess that many villages enforce  up to 4 week quarantines on those coming from abroad. I've also heard about local officials confiscating passports of those with relatives known to be residing in the US to keep them from leaving. Regardless, it has definitely affected our decision about travel into China in the "don't do it" direction, and I am not able at this time to foresee a time when we will decide otherwise. Though we remain ever hopeful about MIL.

Freedomin5

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Re: Is anyone buying China large cap etf
« Reply #16 on: December 31, 2021, 03:37:18 PM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

I think you're missing the point. It would be more obvious that the performance of a international stock index depends in part of the Chinese economy. The fact that even an index of US domiciled companies has a good chunk of exposure to China should be obvious to most people but frequently people don't realize it, hence the value in pointing it out.

@Freedomin5 I used to go to China but haven't had the chance since the coronavirus started. I similarly used to host a lot of Chinese scientists who traveled to the USA and haven't had the chance since 2019.

Would be really curious in your on the ground take about the messaging going on inside the country about both outsiders and Chinese people who travel outside of China if you are willing to share.

Sure, everyone buys and sells stuff to with everyone else today. That's not what OP was asking though, but someone still squeezed in the "VTSAX can be all things to all people, so why bother with new ideas". How brainless and dull.

Are you just in a bad mood this morning? Or evening I guess for you.

People are posting they they avoid investing in China (whether for political reasons or because they think the economy over is actually in bad shape). It has been pointed out that even if they only buy VTSAX to avoid investing in China, they're still investing in China.

For whatever reason you seem to be reading a lot of other stuff into that (true) observation.

Thank you. That was exactly what I meant. You explained it much better than I could.

Anyone who claims they have 0% in China or ďmakes sure none of my money supports Chinaís systemĒ likely doesnít realize just how much the big American companies they are investing in are spending to support Chinaís systems, infrastructure, and economy.



The travel is mostly related to COVID. Itís a lot easier for Chinese nationals to travel. They are allowed to return but expensive and limited flights makes it challenging.

There is some talk of ďdepending on ourselvesĒ and newsmentions every time China produces a great accomplishment and a continued building of national pride. There was also recent talk of taxing benefits for expats, which is a big deal because our benefits are worth a lot of money, but then an article just came out saying that they are putting a hold on these new taxes and extending the grace period until 2023, in certain sectors in certain regions. Recently an article came out talking about how China is encouraging foreign investment.

At the same time, we often see news articles about some expat not following the rules or respecting Chinese culture. A few days ago, a Chinese woman yelled at guards when asked to take a NAT test and it was clearly pointed out that the woman spent 7 years living in the US. Iím sure there are Chinese people who also donít follow the rules or want to take NAT tests, but they donít get the same side-eye on the news. Little things like that.

In real life though, we havenít experienced more hostility or condescension than what Iíve experienced visiting other countries. The condescension when we vacationed in France from the McDonalds worker in Paris was worse (because I spoke English-accented Quťbťcois French).

I hesitate to put my own interpretation on what Iím seeing because this is China, and I realize that my paradigm is very different from the Chinese paradigm.
« Last Edit: December 31, 2021, 03:47:02 PM by Freedomin5 »

Freedomin5

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Re: Is anyone buying China large cap etf
« Reply #17 on: December 31, 2021, 03:54:00 PM »
As recently as a year ago I had thought about China. However, the communist party has used COVID to really tighten things up. There is effectively a two month quarantine for all foreign travel which looks likely to last years (1 month upon entering the country, typically 1 month after arriving at your local destination). The popular(government) media and social media have become highly denigrating of non-Chinese people and Chinese people who travel abroad. I see China turning sharply inward, losing any sort of innovative edge it may have had, and becoming varying degrees of hostile and condescending toward outsiders. It benefits those who control the communist party for this to happen, and it matters little what the effect on ordinary Chinese people will be. I perceive that 2008-2019 were the high water mark of current Chinese society, though momentum will keep it moving forward reasonably fast for that long again.

The bolded section is incorrect. I live in China and am therefore highly interested in current quarantine requirements as it directly affects me. The requirements are 14-21 days depending on the city, plus maybe another 0-14 days if you are transferring to a different city within the country, depending on the city.

The rest...I can see why you would say that, though the messages are somewhat mixed and rather obtuse.
Likewise, I've spent around 2 years in China (though mostly 2009-2010, and none since 2018). We attempted to bring MIL from China to the US throughout 2021, and it is certainly possible, but the excessive quarantine time makes it not worth it. My crowd is I am guessing much more rural and less educated than your crowd, so some of the small villages may enforce a different policy than what you are accustomed to. But also I have been hearing this second hand, and it wouldn't surprise me if those people were also hearing second hand, so I would not be surprised if 2 months was an exaggeration. But it also would not surprise me if it was 5-7 weeks (5 weeks overlapping with your range). Then again, I have heard that Chinese people returning from abroad have had to quarantine for the usual time upon entering, and then get in big trouble after they decide to take a walk after an additional 2 weeks quarantining in the village, so I guess that many villages enforce  up to 4 week quarantines on those coming from abroad. I've also heard about local officials confiscating passports of those with relatives known to be residing in the US to keep them from leaving. Regardless, it has definitely affected our decision about travel into China in the "don't do it" direction, and I am not able at this time to foresee a time when we will decide otherwise. Though we remain ever hopeful about MIL.

Yes, I would not be surprised if local villages put their own spin on the official policy, maybe in an attempt to gain brownie points (the teacher only asked us to quarantine for two weeks, but we will do 4 weeks because we are good officials who go above and beyond!). Also, I think some people donít realize that they have to get cleared after their 14 days. Some people count the days off in their head and leave the house on the 14th day, when in reality, they need to quarantine for the full 14 days, get officially cleared by the neighborhood health committee, get a quarantine completion certificate, and then they are allowed to leave the house. So I suspect in the case where the person got in trouble, there were extenuating circumstances and the person didnít follow the rules and procedures to the T.

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #18 on: January 01, 2022, 06:53:47 PM »
I hold a small amount of VWO, about 3% of my liquid NW. So I have at least a 1% China allocation plus my exposure inside the US indices.

For the fastest rising stable economy in the world, Chinese stocks have not done well. Just compare FXI to the S&P500. FXI is back where it was 5y ago, while the US market has more than doubled.

If this is the performance when the Chinese economy is growing 6-7% per year, just imagine how bad it will be if growth slows to 3-4% or if a recession occurs. There is something siphoning off the capital created by Chinese companies, so that it never fully makes its way to shareholders. How else could the performance be so bad when economic times have been this good?

Beyond audit issues, secret debts, and reporting issues, I think the Chinese legal system offers little recourse for foreign capitalists who try to come and make a buck there. Chile, Mexico, Thailand, South Africa, and a number of other EMs look a lot better. I also lump Russia, Turkey, Egypt, and Belarus into the "nearly uninvestable" category.

Yeah thatís a good point, perhaps I mistook cheap for value....

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #19 on: January 01, 2022, 06:55:52 PM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

As recently as a year ago I had thought about China. However, the communist party has used COVID to really tighten things up. There is effectively a two month quarantine for all foreign travel which looks likely to last years (1 month upon entering the country, typically 1 month after arriving at your local destination). The popular(government) media and social media have become highly denigrating of non-Chinese people and Chinese people who travel abroad. I see China turning sharply inward, losing any sort of innovative edge it may have had, and becoming varying degrees of hostile and condescending toward outsiders. It benefits those who control the communist party for this to happen, and it matters little what the effect on ordinary Chinese people will be. I perceive that 2008-2019 were the high water mark of current Chinese society, though momentum will keep it moving forward reasonably fast for that long again.

The bolded section is incorrect. I live in China and am therefore highly interested in current quarantine requirements as it directly affects me. The requirements are 14-21 days depending on the city, plus maybe another 0-14 days if you are transferring to a different city within the country, depending on the city.

The rest...I can see why you would say that, though the messages are somewhat mixed and rather obtuse.

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

Ok. Ta.....hate to see when top few sp500 stock crash...

Paul der Krake

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Re: Is anyone buying China large cap etf
« Reply #20 on: January 01, 2022, 10:35:49 PM »
I actually think the tech sector in China might be on the cusp of seriously challenging US hegemony. Bytedance pays 400-600k/year for experienced software engineers on the west coast, right now, today.

I have no idea how to capture some of that value for myself. I don't trust, or don't understand well enough:
1) the Chinese government
2) the Chinese legal system
3) the ability or willingness of the West to blackball Chinese tech
4) the comical, wink-wink Cayman Islands setup that makes the stock investable in the first place

On the other hand, I fundamentally understand how western corporations operate. How sales are done, what's tolerated, what's not tolerated, who has the power to make decisions, how management and labor is incentivized, who regulates whom. I understand that if there's a problem among shareholders, everyone goes to court in Delaware or London and hash it out according to well-established legal principles that I've passively internalized through living in the West.

To me, Chinese corporations are black boxes with a very small surface of observability. Pass.

maizefolk

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Re: Is anyone buying China large cap etf
« Reply #21 on: January 02, 2022, 08:02:39 AM »
4) the comical, wink-wink Cayman Islands setup that makes the stock investable in the first place

For folks who aren't familiar with this last point it is worth reading up on. The best google term is probably "Variable Interest Entity". Matt Levine had a good write up at Bloomberg about the approach when Didi listed last summer. It is wild.

Quote
The worst outcome would be something like the Chinese government declaring ďall these VIE contracts are actually a disguised form of foreign ownership, which is not allowed by the rules, so they are all void and your Didi and Alibaba shares are worthless.Ē That would Ö I mean, these VIE contracts are a disguised form of foreign ownership, and a fairly thin disguise. (Itís not like Chinese government authorities are unaware that foreign investors own shares in Alibaba; itís just that they seem to accept this level of technical compliance with the rules.) This is a real risk! Itís in Didiís risk factors

It's also work reading about what happened to ARM's China subsidiary.

Quote
Removing Allen Wu has proven to be very difficult. Despite a 7-1 vote by the Arm China board, the company seal was still held by Allen Wu. In China, the seal/chop is a stamp which authorizes the person in possession to bind a company and its representatives with rights and obligations. Retrieving this seal and the business license would be a multiyear drawn-out legal process. Furthermore, it would mean at least some investors besides Arm must be along for the ride. Currently other investors still agree with ousting Allen Wu. The Chinese court system would also need to agree with ousting an executive in favor of one that was hand selected by western influencers.

Despite formally being fired, Allen Wu has remained in power. He ousted executives that were loyal to Arm. He has even hired security paid for by Arm China that reports to him. This security has kept Arm out of the Arm China offices. Allen Wu has aggressively taken over the firm and is operating it how he sees fit.

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Re: Is anyone buying China large cap etf
« Reply #22 on: January 02, 2022, 08:29:47 AM »
Again, i will not give my $ to regimes that are clearly enemies of the west, Canada. That includes Putin as well.

I'm confident that MMM does the same. I'm shocked that someone would do otherwise actually.
Individuals should not complain that America is losing the jobs, technology edge etc and at the same time finance the foes.

I would not give $ to big tobaccos, church etc etc. All entities that make profits on others misery.

Freedomin5

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Re: Is anyone buying China large cap etf
« Reply #23 on: January 02, 2022, 03:32:48 PM »
Again, i will not give my $ to regimes that are clearly enemies of the west, Canada. That includes Putin as well.

How do you feel about the facts pointed out below by maizefolk? Do you avoid investing in any major US company that has a presence in China and that invests in China? Because Tesla recently built a gigafactory in China and hires local Chinese to run it. Disney built an ecological park for Shanghai. Pfizer is working on a deal to partner with a local Chinese pharmaceutical company to produce the Pfizer BioNTech COVID vaccine. The list goes on and on...

The fact that even an index of US domiciled companies has a good chunk of exposure to China should be obvious to most people but frequently people don't realize it, hence the value in pointing it out.

People are posting they they avoid investing in China (whether for political reasons or because they think the economy over is actually in bad shape). It has been pointed out that even if they only buy VTSAX to avoid investing in China, they're still investing in China.

Blender Bender

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Re: Is anyone buying China large cap etf
« Reply #24 on: January 02, 2022, 04:02:39 PM »

How do you feel about the facts pointed out below by maizefolk? Do you avoid investing in any major US company that has a presence in China and that invests in China? Because Tesla recently built a gigafactory in China and hires local Chinese to run it. Disney built an ecological park for Shanghai. Pfizer is working on a deal to partner with a local Chinese pharmaceutical company to produce the Pfizer BioNTech COVID vaccine. The list goes on and on...


Similar way as I avoid over-consumption. And i'm getting similar responses.
E.g. I say: a mansion, big SUV, boats, flying for "pleasure" to be avoided since the persons footprint would be way too big for the planet to support.
I get reposes: but you bike and you create extra CO2 when breathing :) Or i use a car (19 yo Pontiac Vibe) to reach XC skiing destination. Same pattern.

I don't, at this moment, hold individual stocks. But i would avoid (responding to your cases) Tesla too (for maybe different reasons too). Disney avoid since i blame it for making kids consumers. Pfizer helping to protect China population (people) from a decease is a good thing BTW (also for all humans).

US corpo world recently is starting to understand that the globalization is not such a good thing, and starting to bring their operation home. Also they are seeing their IP has been stolen by China, and trying to rectify it. E.g. my biggest holding, Apple, is trying to do the right things for the planet; and they are re-thinking China as the main production centre.
I even would not hold Coca-Cola. I don't know their single product that should be consumed by humans (so unhealthy); no support here :)

Our choices (in investments too) do have consequences. We need to make the planet a better place. Instead of being deadlocked in "but X does bad too, so i can too". We can only control what we can do. I start with myself, making sure that my choices are at least not horrible. But of course nothing is back or white.

I'm not sure if it makes sense what i'm trying to say, i do hope it does.
« Last Edit: January 02, 2022, 04:26:31 PM by ArnoldK »

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Re: Is anyone buying China large cap etf
« Reply #25 on: January 03, 2022, 09:46:29 AM »

How do you feel about the facts pointed out below by maizefolk? Do you avoid investing in any major US company that has a presence in China and that invests in China? Because Tesla recently built a gigafactory in China and hires local Chinese to run it. Disney built an ecological park for Shanghai. Pfizer is working on a deal to partner with a local Chinese pharmaceutical company to produce the Pfizer BioNTech COVID vaccine. The list goes on and on...


Similar way as I avoid over-consumption. And i'm getting similar responses.
E.g. I say: a mansion, big SUV, boats, flying for "pleasure" to be avoided since the persons footprint would be way too big for the planet to support.
I get reposes: but you bike and you create extra CO2 when breathing :) Or i use a car (19 yo Pontiac Vibe) to reach XC skiing destination. Same pattern.

I don't, at this moment, hold individual stocks. But i would avoid (responding to your cases) Tesla too (for maybe different reasons too). Disney avoid since i blame it for making kids consumers. Pfizer helping to protect China population (people) from a decease is a good thing BTW (also for all humans).

US corpo world recently is starting to understand that the globalization is not such a good thing, and starting to bring their operation home. Also they are seeing their IP has been stolen by China, and trying to rectify it. E.g. my biggest holding, Apple, is trying to do the right things for the planet; and they are re-thinking China as the main production centre.
I even would not hold Coca-Cola. I don't know their single product that should be consumed by humans (so unhealthy); no support here :)

Our choices (in investments too) do have consequences. We need to make the planet a better place. Instead of being deadlocked in "but X does bad too, so i can too". We can only control what we can do. I start with myself, making sure that my choices are at least not horrible. But of course nothing is back or white.

I'm not sure if it makes sense what i'm trying to say, i do hope it does.

This makes sense, but it circles us back around to the old paradox often mentioned here that most of the economy and most of the stock market consist of companies that are doing things that are bad for people.

Any investor who owns the indices owns tobacco companies giving people cancer, pharma companies using IP laws to squeeze the last dimes out of sick people, SUV manufacturers and fossil fuel companies doing all they can to increase the pace of environmental destruction, electronics companies forcing slaves to mine rainforests for rare earth elements, information companies nudging people toward violent extremism and mental health problems, manufacturers of plastic futuretrash, advertising companies that encourage people to over-consume, the sugar and restaurant industries giving people obesity and diabetes, alcohol which is mostly consumed by alcoholics, banks that market credit cards and payday loans to financially illiterate people, pesticide/herbicide companies lobbying Congress to silence scientific evidence about the dangers of their products, etc. That's not China, it's the S&P500!

Whether these evils amount to more than or less than an index in another country is beside the point. It is very hard to be an investor anywhere and not profit from the destruction of people, because most of what the people consume nowadays contributes to their destruction. We've moved beyond the point where people strive for "higher living standards" and we're now living in an economy where the good life is only obtained by avoiding dozens of types of addiction, shepherding one's attention carefully, resisting consumption, and resisting the popular culture, while simultaneously --- investing in the indices.

There are questions of guilt related to owning the gears that grind people and the planet into misery, debt, and death. To some extent, the very existence of products like Facebook, Coca Cola, cigarettes, plastic grocery sacks, Twinkies, Whoppers, Dodge Durangos, McMansions, TikTok, and coal power plants is the evil, because these products can only cause destruction of human lives and families. Through another lens, these toxic products exist because people are aggressively buying them, and wholeheartedly believing that their lives are better thanks to them. Even as they gain weight, develop cancers, go deeper into debt, exhibit more and more signs of addiction, spend their entire lives working stressful jobs, and increasingly live in polluted wastelands with beggars on every corner, consumers keep on believing that they'll be the smiling models in the advertisements any day now. To some extent the relationship between corporation and consumer is less like a predator/prey model and more like a cult, where the manipulators and the manipulated are the same people, and they're all striving for something that will prove delusional and deadly in the end.

To protect people from themselves would require a government regime more controlling than communist China, and some evil acts would be necessary to keep such a regime in charge. China's strict COVID policies have probably saved the lives of millions of people, whereas the U.S's fumbling of the pandemic and infights over the tiny inconveniences required for minimal cooperation resulted in the deaths of probably a million people, judging by the excess death rate. Does that make up for the genocide the Chinese are pursuing on their Western borders? That's another way of asking whether it's more ethical to own Facebook, Google, and Apple, or a Chinese bank, manufacturer, and transportation firms that each benefit in some way from forced labor camps?

The endpoint of this reasoning isn't nihilism, resignation to evil, or radical off-grid anticapitalism; it's the realization that nothing is black-and-white and being ethical isn't as easy as sitting in VTSAX and forgetting about how the dividends and capital gains are essentially the life and joy that has been taken from other people and given to you. We have our own accounts to balance, and I suspect we have to pay back the world outside of our brokerage accounts. At the very least, don't parlay investment gains into more self-destruction or planetary destruction.
« Last Edit: January 03, 2022, 09:50:10 AM by ChpBstrd »

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Re: Is anyone buying China large cap etf
« Reply #26 on: January 03, 2022, 10:37:42 AM »
This makes sense, but it circles us back around to the old paradox often mentioned here that most of the economy and most of the stock market consist of companies that are doing things that are bad for people.

I get your points, they are valid to me too. But there seems no way there to proceed without setting some (maybe artificial) boundaries.

Getting China ETF looks to me like giving a blank cheque to the China government / regime. Such investors would have no way of even understanding what the $ is/will be used for. If the regime decides to take over companies and use them against the west, I'm talking about things like a REAL war. And we know that China (and Russia) will try to start wars to change the status quo in the world. Against my country.

In the US I would hope that the corpos should be trying to do more of the right things since consumers might force them to do so, more and more overtime.

I'm responsible for my (direct) decisions, as an investor and a consumer. Selecting a specific ETF (direct decision), is to some extent a leap of faith that the related companies, at least the top holdings, have a chance to do the right things. And its consumers eventually do the right things. Me, as a consumer I make direct decisions too (what to buy, and from what company).

So, I have 2 votes: selecting companies, and selecting products to buy. This is a lot, and this is fair. I vote for a sustainable future. If everyone would follow these, then the future is not bleak. And here my responsibility ends. I'm trying not to stress too much about it too.

It seems that the voting allegory works well. It does not ensure that we get what i voted for, but this is a vote among others. Fair. Just maybe needs to be more active in promoting "the green party".
« Last Edit: January 03, 2022, 10:46:27 AM by ArnoldK »

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Re: Is anyone buying China large cap etf
« Reply #27 on: January 03, 2022, 05:38:58 PM »
Thankfully the USA vs China issue is of no concern to me.

Iím merely considering if the China large cap efts are relatively better value at the moment.

I donít care who wins.....

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Re: Is anyone buying China large cap etf
« Reply #28 on: January 03, 2022, 05:43:08 PM »
Thankfully the USA vs China issue is of no concern to me.

Iím merely considering if the China large cap efts are relatively better value at the moment.

I donít care who wins.....

😂🤣

maizefolk

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Re: Is anyone buying China large cap etf
« Reply #29 on: January 04, 2022, 09:13:21 PM »
Had a zoom call with a collaborator and friend in China about a paper. We went through all the work stuff. Took about 50 minutes. Then we moved to the "chatting about random life stuff because we don't have to be anywhere until the end of the hour" phase of the conversation.

The person I was chatting with said "things are getting really bad here in $NameOfCity with..." and then the zoom connection cut out completely after being really stable up until then.

Almost certainly just bad luck/timing. But still felt like the ominous foreshadowing scene from the start of a movie. ... I wonder how people felt exchanging letters (or phone calls) between the UK and Germany in 1938....

Anyway, I'm going way off topic for this thread. Sorry about that.

@bthewalls, if it really does come down to open conflict between the USA and China, we all lose. I don't care where in the world you live.

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Re: Is anyone buying China large cap etf
« Reply #30 on: January 05, 2022, 07:08:35 AM »
... if it really does come down to open conflict between the USA and China, we all lose. I don't care where in the world you live.

Beware of the Thucydides Trap.

In the past couple of hundred years, the majority of these have ended up in war. I would say about a 50% chance of a war. A war unlike the World Wars, but just regional conflict.


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Re: Is anyone buying China large cap etf
« Reply #31 on: January 05, 2022, 07:38:43 AM »
My reasons for not having China in my portfolio had nothing to do with war or conflict, or a moral issue, but more a financial one.

We depend on the companies as well as the country for a successful financial system. The company reports financial and business details correctly which gives the investor an opportunity to judge its future potential earnings. The government sets the rules and an equal level field framework where the investor and companies can come together.

I believe that in China, neither of the two conditions I have mentioned above are being met.

The companies are not transparent in their financial details. Numbers are not trustworthy. Companies that are run by the CCP(Chinese Communist Party) politburo members or their families have a major advantage over others that do not(See Desmond Lam's book).

The CCP has not set up a proper framework for investing. Arbitrary rules and regulations like the sudden closure of all EduTech companies caused investors to lose billions. Any company whose founder has a high profile suddenly disappears for "re-education" and if they reappear, they are not the person they were before. The CCP does not tolerate any personality whose popularity is high (e.g. Jack Ma).

It is not just me. The average Chinese investor who jumped to the stock market 10-15 years ago, got badly burnt and have moved away from the stock market and moved to real estate. 70% of Chinese family savings are in real estate. When (not if) the real estate bubble bursts, the impact it will have will reverberate thru the Chinese financial system. We are already seeing the first signs of the real estate crash with the Evergrande debt crisis.

The CCP also knows that the economy is tanking. That is why you are seeing them replace the economic promises that they made to their citizens with hyper-nationalism (e.g Wolf-Warrior diplomacy and bullying of smaller countries around it).

For me, China is a bad place for investing my money.
« Last Edit: January 05, 2022, 07:55:20 AM by CowboyAndIndian »

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Re: Is anyone buying China large cap etf
« Reply #32 on: January 05, 2022, 07:57:43 AM »

conwy

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Re: Is anyone buying China large cap etf
« Reply #33 on: January 05, 2022, 09:11:18 AM »
I have some China exposure via AVES. I think emerging markets and small-value are cheap and are likely to have better-than-market expected returns based on past data. If I could find an emerging market small cap value fund I would buy it, but AVES was the closest I could find.

Why do you prefer large cap? And any reason to bias to China, compared to SE Asia or emerging markets generally?

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #34 on: January 05, 2022, 03:14:36 PM »
Had a zoom call with a collaborator and friend in China about a paper. We went through all the work stuff. Took about 50 minutes. Then we moved to the "chatting about random life stuff because we don't have to be anywhere until the end of the hour" phase of the conversation.

The person I was chatting with said "things are getting really bad here in $NameOfCity with..." and then the zoom connection cut out completely after being really stable up until then.

Almost certainly just bad luck/timing. But still felt like the ominous foreshadowing scene from the start of a movie. ... I wonder how people felt exchanging letters (or phone calls) between the UK and Germany in 1938....

Anyway, I'm going way off topic for this thread. Sorry about that.

@bthewalls, if it really does come down to open conflict between the USA and China, we all lose. I don't care where in the world you live.

There will never be open conflict to that scale

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #35 on: January 05, 2022, 03:20:00 PM »
I have some China exposure via AVES. I think emerging markets and small-value are cheap and are likely to have better-than-market expected returns based on past data. If I could find an emerging market small cap value fund I would buy it, but AVES was the closest I could find.

Why do you prefer large cap? And any reason to bias to China, compared to SE Asia or emerging markets generally?

Large cap because I donít know enough to risk non uk or USA single stocks.....Iíd rather take 7 to 10pc per year....China due to sheer scale and a wager to hedge against a declining USA in 40 to 50 years (for my kids accounts)

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #36 on: January 05, 2022, 03:21:16 PM »
You realize that anyone who holds any fund (like VTSAX) that holds large American companies like Tesla, Coca Cola, Apple, Amazon, Microsoft, Google, Johnson & Johnson, Proctor & Gamble, etc., will indirectly have China or some kind of China influence in their portfolio, right?

And you do realise that VTSAX is the US stock market, right? You could, y'know at least have gone with a global fund.

But nah, VTSAX for everything baby. Even gets you crypto and commodity exposure.

I think you're missing the point. It would be more obvious that the performance of a international stock index depends in part of the Chinese economy. The fact that even an index of US domiciled companies has a good chunk of exposure to China should be obvious to most people but frequently people don't realize it, hence the value in pointing it out.

@Freedomin5 I used to go to China but haven't had the chance since the coronavirus started. I similarly used to host a lot of Chinese scientists who traveled to the USA and haven't had the chance since 2019.

Would be really curious in your on the ground take about the messaging going on inside the country about both outsiders and Chinese people who travel outside of China if you are willing to share.

Sure, everyone buys and sells stuff to with everyone else today. That's not what OP was asking though, but someone still squeezed in the "VTSAX can be all things to all people, so why bother with new ideas". How brainless and dull.

Vand what you fancy at moment outside of USA or uk,say China or Asia?

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Re: Is anyone buying China large cap etf
« Reply #37 on: January 05, 2022, 03:25:55 PM »
How about  iShares Hong Kong (EWH) or Taiwan (EWT), does this count?   We still own both of these, although we've since switched to a broader global equity index for new purchases for the international part of the portfolio.   I've never been willing to own investments based strictly on the mainland.   

I'm a bit disappointed in how China is undoing the societal gains of the oughties and may be turning inward again.    I work for a Chinese technology company & I have to say there are a lot of good people in China.   They deserve better than the Chinese communist party.

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Re: Is anyone buying China large cap etf
« Reply #38 on: January 05, 2022, 09:24:40 PM »
Large cap because I donít know enough to risk non uk or USA single stocks.....Iíd rather take 7 to 10pc per year....China due to sheer scale and a wager to hedge against a declining USA in 40 to 50 years (for my kids accounts)

I'm not saying you should risk single stocks, but I would much rather hold a total market portfolio rather than only large cap, unless you have a solid evidence-based reason to believe large will outperform relative to the market. (In the case of small value I think such evidence exists, based on the long-term Fama-French studies.)

Note: I didn't mention yet that my primary holding is a global Vanguard fund which includes cap-weighted developed and emerging markets funds, in proportion to their capitalisation relative to the whole market, so even my emerging-small-value holding is only a tilt, and not a big one at that.

This wager, as you put it, wouldn't necessarily end up profitably for you. Just because a country is ascending or declining relative to another country, that doesn't mean the ascension/decline would be realised as profits or liabilities on either side. The economy isn't the stock market. There are all kinds of confounding factors that make it extremely difficult to translate long-term geopolitical trends into stock market forecasts. Trends can already be priced in. A crisis can open opportunities for new businesses. Governments can nationalise existing businesses. Governments can alter monetary policy. Currency policy can affect some sectors differently than others (recent example: Erdogan's policies in Turkey affecting importers disproportionately to exporters). Different sized companies can behave differently (e.g.: Japan small caps outperforming large during Japan's decline). I believe the amount and complexity of change makes it next to impossible to forecast whole country stock market moves, let alone profit from them.

The only way to get around global geopolitical turbulence is to diversify across countries, which can be done easily and cheaply with global index funds.
« Last Edit: January 05, 2022, 09:29:36 PM by conwy »

bthewalls

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Re: Is anyone buying China large cap etf
« Reply #39 on: January 06, 2022, 03:15:42 PM »
Large cap because I donít know enough to risk non uk or USA single stocks.....Iíd rather take 7 to 10pc per year....China due to sheer scale and a wager to hedge against a declining USA in 40 to 50 years (for my kids accounts)

I'm not saying you should risk single stocks, but I would much rather hold a total market portfolio rather than only large cap, unless you have a solid evidence-based reason to believe large will outperform relative to the market. (In the case of small value I think such evidence exists, based on the long-term Fama-French studies.)

Note: I didn't mention yet that my primary holding is a global Vanguard fund which includes cap-weighted developed and emerging markets funds, in proportion to their capitalisation relative to the whole market, so even my emerging-small-value holding is only a tilt, and not a big one at that.

This wager, as you put it, wouldn't necessarily end up profitably for you. Just because a country is ascending or declining relative to another country, that doesn't mean the ascension/decline would be realised as profits or liabilities on either side. The economy isn't the stock market. There are all kinds of confounding factors that make it extremely difficult to translate long-term geopolitical trends into stock market forecasts. Trends can already be priced in. A crisis can open opportunities for new businesses. Governments can nationalise existing businesses. Governments can alter monetary policy. Currency policy can affect some sectors differently than others (recent example: Erdogan's policies in Turkey affecting importers disproportionately to exporters). Different sized companies can behave differently (e.g.: Japan small caps outperforming large during Japan's decline). I believe the amount and complexity of change makes it next to impossible to forecast whole country stock market moves, let alone profit from them

The only way to get around global geopolitical turbulence is to diversify across countries, which can be done easily and cheaply with global index funds.

I get you....as an amateur passive investor Iím quite happy to sit with large cap Of any main economy,or vwrl which is my main go to......its pretty dull but safe...larger gains could be got with bit of research I suppose.

I take an odd gamble though...Tesla etc...