uploads///Performance of China focused Mutual Funds

SSE Composite Index Falls on Worries of a US Interest Rate Hike

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Nov. 20 2020, Updated 1:52 p.m. ET

SSE Composite Index fell

The SSE (Shanghai Stock Exchange) Composite Index fell 1.0% to 2,807.51 from May 11 to May 18, 2016, after the minutes of the Federal Reserve’s April policy meeting hinted that a rate hike might happen in June if the US inflation rate picks up and job growth rises. A rate hike in the United States may exacerbate Chinese capital outflows.

Further, the equity markets ended lower as Zhang Dejiang, chairman of the National People’s Congress Standing Committee, didn’t give any details about the launch of a much-anticipated trial scheme connecting the Hong Kong and Shenzhen markets during his three-day Hong Kong visit.

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The SSE Composite Index includes all stocks (A-shares and B-shares) listed on the Shanghai and Shenzhen stock exchanges. A-shares are shares denominated in domestic currency (i.e., yuan) and are available only to local investors. On the other hand, B-shares are shares denominated in foreign currency such as the US dollar on the Shanghai Stock Exchange and the Hong Kong dollar on the Shenzhen Stock Exchange and are available to foreign investors.

Returns of China-focused funds

From May 11 to May 18, the Oberweis China Opportunities Fund (OBCHX) turned out to be the best performer and rose by 1.0%

The Guinness Atkinson China and Hong Kong Fund (ICKHX) rose 0.5%, while the Matthews China Fund Investor Class (MCHFX), the Fidelity Advisor China Region Fund Class A, and the Templeton China World Fund (TCWAX) fell by 1.3%, 1.0%, and, 0.7%, respectively, during the same period.

Meanwhile, the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) and the iShares MSCI China ETF (MCHI) fell 0.9% and 0.8%, respectively, over the same period.

The ADRs (American depository receipts) of NetEase (NTES), Baidu (BIDU), and JD.com (JD) rose by 12.7%, 3.9%, and 2.0%, respectively, while 58.com (WUBA) fell 1.4% over the same period.

In the next article in this series, we will look at China’s industrial production data for April.

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