Left-Behind Chinese Smallcaps Offer An Interesting Opportunity

Left-Behind Chinese Smallcaps Offer An Interesting Opportunity
Andrew Rummer

about 3 years ago1 min

While benchmark Chinese stock indexes are currently hitting multi-year highs, the smallest companies are being left behind – potentially creating an opportunity for adventurous investors. 

As the chart shows, the CSI 1000 index of smaller Chinese companies is trading at the lowest level in more than a decade compared to the CSI 300 index of the nation’s biggest stocks. It’s also looking pretty cheap versus the MSCI World index of the largest stocks in developed markets like the US and Japan.

Small Chinese stocks versus global developed markets

Those willing to bet on a reversal to the mean could check out the iShares MSCI China Small-Cap exchange traded fund, which tracks the MSCI China Small Cap index.

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