2024-09-29
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"buy 'everything' in china!" - wall street's enthusiasm for chinese assets is heating up rapidly.
statistics show that during the week from september 23 to september 27, the asset size of many chinese concept stock etfs such as kweb, fxi, and mchi has surged, and net capital inflows have reached new highs in the past year or even the past three years. the scale of many chinese concept stock etfs has rebounded strongly and hit new stage highs.
china concept stock etf net inflows hit a new high
futu data shows that kraneshares china overseas internet etf (kweb) saw a net inflow of us$199 million in the week from september 23 to september 27, setting a new high since march 2023. kweb increased by more than 26% in a single week. ; as of september 27, the latest asset size of the kraneshares china overseas internet etf has risen to approximately us$5.89 billion, becoming the largest overseas chinese stock etf again.
kweb’s asset size increased sharply source: futu
this etf is one of the products heavily held by the well-known hedge fund tycoon david tepper. according to the u.s. securities and exchange commission (sec), in the second quarter of this year, david tepper’s appaloosa asset management company focused on adding positions in two chinese index funds, including ishares china large cap etf (ishares china). large-cap, fxi) added 565,000 shares, with a market value of us$180 million at the end of the quarter; and added 1.015 million shares of kraneshares china overseas internet etf (kweb), with a market value of us$121 million at the end of the quarter.
on september 26, david tepper publicly stated that he would increase the allocation ratio of chinese assets and has purchased more "everything" related to china after the u.s. interest rate cut, such as etfs, futures, etc.
the reporter noticed that as of september 25, kweb’s capital scale was still us$4.65 billion; as of september 27, it had soared to us$5.89 billion. in other words, kweb’s scale had surged by more than us$1.2 billion in just two trading days. the increase reached 26%. compared with the us$4.18 billion at the end of august, the increase was more than 40%, which shows that the enthusiasm for funds is rapidly increasing.
as another major chinese concept stock etf, msci china etf-ishares (mchi) rose more than 19% last week. as of september 27, the etf’s asset size reached us$5.21 billion, an increase of more than 20% compared to the end of august. . among them, net capital inflows reached us$254 million in the week from september 23 to september 27, reversing several consecutive weeks of net outflows and setting a record for the highest single-week net inflow in the past three years.
mchi’s net inflow of funds in a single week was us$254 million. source: futu
at the same time, china's large-cap stock etf-ishares (fxi) had a net inflow of us$497 million in the week from september 23 to september 27, which also hit a new high in the past three years; as of september 27, the etf assets reached us$4.71 billion, an increase of nearly 19% from the end of august.
fxi’s net inflow of funds in a single week was us$497 million. source: futu
in addition, the three-fold long ftse china etf-direxion (yinn), which has increased by nearly 60% in a week, has increased its asset size by approximately 56% on september 27 compared with the end of august.
who is betting on chinese assets?
david tepper is not the only one who is optimistic about chinese assets. nick wilcox, managing director of hedge fund company man group plc, also recently told the media that he is supported by continued policies. impact, china's stock market is expected to continue its rebound momentum. the optimism builds on improving earnings and the federal reserve's easing policy, which has given china more room to cut interest rates.
michael burry, the prototype of the movie "the big short", is another well-known investor betting on chinese concept stocks. according to the u.s. sec, as of the end of the second quarter of this year, the total market value of u.s. stocks held by michael burry's hedge fund scion had nearly halved. however, it significantly increased its holdings in alibaba in the second quarter, making the latter the fund's largest holding. shares, the market value of its holdings at the end of the quarter reached us$11.16 million, accounting for 21.26% of its holdings portfolio. while increasing its holdings in alibaba, scion also increased its holdings of 35,000 shares in baidu, making it the fourth largest holding.
in addition, many chinese concept stocks such as pinduoduo, alibaba, netease, jd.com, huazhu, shell, iqiyi, manbang, ctrip, new oriental, and tencent music have received institutional overweights to varying degrees.
for example, jpmorgan chase significantly increased its positions in pinduoduo, alibaba, iqiyi and other stocks in the second quarter, including buying 3.1914 million shares of pinduoduo. the increased shareholding accounted for 63% of the original number of shares held. the market value of the position at the end of the quarter reached 11.01 us$100 million; bought 2.841 million shares of alibaba, increasing its holdings by 32%; buying 11.1841 million shares of iqiyi, increasing its holdings by 72%.
asset management giant baiji investment reduced its holdings in u.s. technology stocks such as nvidia and increased its position in pinduoduo by 348,000 shares, which was its second largest increase in positions in the quarter; soros fund bought 1.025 million shares in alibaba in the second quarter. and 1.275 million shares of jd.com, with the stock market value at the end of the quarter being us$73.8 million and us$32.95 million respectively.