- China’s outsize position in emerging markets has created a dilemma for many investors.
- Investment funds with similarly large allocations to Chinese assets did well in 2019 and 2020, when the country’s rise drove gains in emerging markets.
- A bout of exceptionally poor performance for Chinese stocks and corporate bonds has led many investors to rethink their heavy exposure to China and how it has hurt their returns.
- The British asset manager recently launched an Asia high-yield bond fund that is underweight on Chinese debt.
- At an American pension fund, the Maryland State Retirement and Pension System, directors and staff have been discussing whether and how to cut back the fund’s exposure to China.
- JPMorgan recently proposed creating a new, enhanced version of its Asia credit index that it said would provide more diversification across countries.
- In the U.S., the Teacher Retirement System of Texas is cutting its target allocation to China by half in its multibillion-dollar emerging-markets stock portfolio.
- The moves by big investors to shift some assets to other Asian markets are taking place just as the clouds over Chinese stocks are clearing.
WSJ — Markets — Investment — Monetary Policy — Economics — Banking
China’s Power in Emerging Markets Creates Headache for Global Investors
China’s outsize position in emerging markets has created a dilemma for investors as many rethink their heavy exposure to the country. JPMorgan recently proposed creating a new, enhanced version of its Asia credit index to provide more diversification across countries.