From Morningstar: 2024-10-16 11:33:00

On Sept. 24, 2024, China announced economic measures, including monetary easing and support for the property sector, to boost liquidity and consumer spending, leading to a big bounce in Chinese stocks. Active equity managers have repositioned portfolios based on optimism about Chinese stocks being attractively valued or caution due to skepticism about the long-term impact of the stimulus package.

Some active managers, like Federated Hermes and Invesco Asian UK, remain positive on China, retaining their overweight positions in Chinese stocks. Lazard Emerging Markets Equity and Pzena Emerging Markets Focused Value have also made no immediate changes to their allocation post-stimulus announcement, as they see compelling value in Chinese companies and sectors.

However, other active managers, such as GQG Partners and Polar Capital Emerging Markets Stars, are more cautious about the recent rally, maintaining underweight positions in China and focusing on selective stock-picking in other sectors. JPM Emerging Markets fund and Fidelity Emerging Markets Equity have consolidated their China exposure, staying slightly underweight, despite cheap valuations and improving shareholder returns.

Passive funds with exposure to China have seen implications from the recent rally in Chinese equities. The recent performance of Chinese stocks has led to an increase in China allocation in passive funds, impacting returns for global emerging-markets equity funds. Investors have shown interest in emerging-markets funds excluding China to gain more control over their China allocation and increase exposure to other markets.



Read more at Morningstar: Should I Buy China Funds Again?