China may still struggle to attract investors this year.
ETF Action’s Mike Akins sees challenges in the country’s ability to generate stock market returns.
“It’s kind of the old cliché. Fool me once, shame on you. Fool me twice, shame on me,” the firm’s founding partner told CNBC’s ETF Edge this week. “There is a situation in which the Chinese economy has been growing. The stock market has gone nowhere. It has been very volatile. There have been periods where it has risen sharply, but also fallen sharply. “
According to Atkins, products from emerging markets excluding China are among the largest inflows seen by ETF Action.
“You have a whole new problem to think about when you go into this market,” he said. “Is it possible to invest from a total return perspective? Or is it really a story of growth in the economy alone and not the actual return of the stock market?”
David Mann of Franklin Templeton Investments cites another problem behind investor hesitation.
“The geopolitical factor with China is certainly on everyone’s minds,” said Mann, the firm’s global head of product and capital markets. “China was down last year. It’s down again this year. Investors are probably very interested in the political side.”
THE Hang Seng Index is down more than 6% this year and nearly 30% over the past 52 weeks.