While investors would look at it as a period of crackdown on for profit tutoring businesses, since the “Double Reduction” policy (to reduce the pressures of homework and after-school tutoring) in 2021, young students indeed are able to spend more time on extracurricular activities that they enjoy. Given the size of addressable market, there has been a proliferation of various STEM (Science, Technology, Engineering, and Mathematics) learning, traditional culture and art-jamming activities in China, including many well-equipped new establishments fitted out with the latest digital technologies such as AI, 3D exhibitions and robotic guides, catering to various developmental needs and interests of children who now have more free time at hand they can deploy for more fun activities. Take the Guangdong province for example, there are 150 public libraries, 144 cultural centers, 352 museums, and 141 art museums built as of 2023 – and many of these are free of charge or charge very affordable fees available for both locals and visitors. In this article we share some of the popular ones that you may find of interest for your next trip to the region.

Extremely negative sentiment culminating Q4 2023 toward Chinese stocks have brought A shares to exceedingly low valuations for an economy with so much inherent growth potential, that it would appear the upside risks far outweigh the downside risks at this point. Meanwhile we see differentiating features of the bedrock and new economy indices including factors tilting toward bargain stocks and high-quality growth at a reasonable price, along with a concentration in strategic sectors that truly drive China’s real economy. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors reviews the factor performance of the onshore A-shares markets in Q4 2023, and reasons why investors may look back at 2024 as a turning point for China’s equity markets, and outstanding entry point for a vintage well positioned for growth recovery in the new normal.

There is a big disconnect between the image of the Chinese economy portrayed by the media and the underlying data. As we start the year, we review key pieces of data from both China and the US. In summary, while the data for China has not been as good as the market may have liked, it was better than what the media would have had us believe. A quick run through the China data for the first nine months of the year, as collated by “China Briefing”: Growth in real GDP 5.2%; industry output 4.0%; services output 6.0%; retail sales 6.8%; fixed asset investment 3.1%. These are very decent growth figures by any international comparison. And China achieved the above figures with a smaller fiscal deficit than the US and while bearing the burden of rebalancing growth away from dependence on the property sector.

Surging Treasury yields and increasing anxiety over the Fed’s ‘higher for longer’ policy led global equities to ‘risk-off’ in the third quarter, though the challenge for Chinese stocks in the CSI 300 Index, down -2.9% for the quarter, remained mostly a function of negative sentiment toward China’s property market and skepticism that policymakers were doing enough to put the nation’s economic recovery back on track. Nevertheless, we saw some very positive signs in Q3, with Beijing beginning to implement targeted stimulus that, by quarter end, already appears to be bearing fruit. From a factor perspective, the new economy portfolio’s quality growth exposure is effectively levered to the upside surprises we see as significantly undervalued at this moment, while the bedrock index should continue to benefit from value and quality exposures, allowing us to identify true bargains poised for revaluation. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, discusses third-quarter performance and outline our expectations for China’s economy and market as 2023 draws to a close.

China has emerged as the world’s largest consumer and producer for industrial robots and equipment. In fact, the country recorded US$6.6 billion sales of industrial robotics in 2022, most of which were produced domestically, far more than the second largest country Germany which registered US$2 billion sales during the same year. Propelled by its changing demographics and its evolution from low-cost manufacturing to high-value added processes, China will continue to drive the development of a homegrown robotics sector and pursue manufacturing upgrade, as underscored by China’s 14th Five Year Plan which explicitly laid out the national strategic goal of building a modern high tech society. Sector leaders would be natural beneficiaries of support measures for this broad policy. In this article we discuss more about how along with development of a highly integrated ecosystem of high tech processes and smart manufacturing systems, China is also integrating new materials, new energy, smart grids and energy saving systems, etc. to its technology-enabled ecosystem that sits well with China’s 2060 net zero targets, and its national strategic goal towards a modern, high tech society.

While global equities generally performed well in Q2 amidst a frenzy around A.I., sentiment toward Chinese stocks remained lacklustre as investor enthusiasm waned. That said there remained bright spots in the market that quietly outperformed - including our multi-factor China Bedrock Economy ETF which delivered YTD USD return of ~12.6% as of Aug 2nd 2023. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors, reviewed the performance of various style factors during the quarter, and discusses why we see China as grossly undervalued going into the second half.

Premia CSI Caixin China Bedrock Economy ETF (2803.HK), Premia CSI Caixin China New Economy ETF (3173.HK), Premia China STAR50 ETF (3151.HK), and Premia Asia Innovative Technology and Metaverse Theme ETF (3181.HK) recently completed the annual rebalancing exercise after market close on Jun 9th 2023. In this article we highlight the changes and provide a brief analysis of the post-rebalance profiles of each ETF.

China’s stock market rode a wave of positive sentiment on a policy shift that brought the world’s second-largest economy out of lockdown, pushing the CSI 300 Index up 4.7% for the quarter and leading to even stronger performance for strategies applying intelligent factor tilts within the bedrock economy and new economy. Even so, macro data throughout the quarter charting China’s recovery from strict zero-COVID containment measures led some investors to question the strength and sustainability of the nation’s economic rebound. In this article, Dr. Phillip Wool, Global Head of Research of Rayliant Global Advisors discusses first-quarter performance and considers what the next phase of China’s reopening could mean for investors.

China markets witnessed strong rally since Oct 2022 trough upon China reopening and covid policy pivot, and we start to see investor flows rotating from offshore to A-shares which are expected to outperform with a longer run for rally. Where are we in China’s reopening trajectory? Who are the policy supported sector leaders well placed to outperform? These are the common questions frequently asked by our clients. In this article, we discuss the 10 most frequently asked questions that came up in our recent conversations with investors and allocators, and share more color about pockets of opportunities as China reopening evolves into the second act for economic growth recovery.

Chinese stocks took a rollercoaster ride in Q4, as the immediate lacklustre reaction to October’s National Congress gave way to a rally on the back of policy support in November. Investors finally cheered Beijing’s abrupt dismantling of its restrictive zero-COVID policies, as the year came to a close. By the end of December, the CSI 300 Index was up 2% on the quarter. Below in this article, Dr. Philip Wool, Managing Director and Head of Investment Solutions of Rayliant Global Advisors, would explore critical developments in the macro picture at the turn of the year, discuss fourth-quarter performance and factor rotation pattern through the period, and also provide our thoughts as to what reopening has in store for Chinese stocks in 2023.

After finishing Q2 as the only emerging market in positive territory, the effects of zero-COVID policy, a continued slump in the property market, and weakening global demand pushed Chinese stocks to the bottom of the EM index in Q3. The CSI 300 Index dropped by -14.3% over the three months from July to September 2022. Below, we offer deeper insights into third-quarter performance—including some bright spots among state-owned enterprises and technology with a policy tailwind—along with our thinking on October’s National Congress and what the rest of the year might have in store.

Notwithstanding the cautious sentiment towards Chinese equities over the past year, the fundamentals suggest that it would be increasingly difficult to ignore Chinese equities as its economic heft and importance continues to grow. In this article, our Senior Advisor Say Boon Lim analyzes the fundamentals of the Chinese economy and why it makes sense for global allocators to deploy Chinese equities for diversification and growth opportunities as the alternative would be a deliberate underweight decision for a large part of the world's GDP and the key driver for global productivity growth.

After lithium, coal and pork, polysilicon appears to be the next in line for potential government price interventions. In fact, polysilicon prices which have been on nine consecutive weeks of spiking spree, have reached 10-year high and the high prices have caused severe supply chain disruptions and suppressed domestic demand for solar panels – and in the process slow down the solar infrastructure build out in China. Such price intervention thus is envisaged to be a positive regulating event, that would shift the industry dynamics from upstream biased to more midstream and downstream actors, to rebalance the supply chain economics for long run sustainable growth of the industry ecosystem. In this article, we shall analyze this in greater details, and explain why despite the headline concerns it would be a positive event for the sector leaders including related constituents in the Premia ETFs, while the polysilicon market is expected to remain tight throughout the year due to persistent strong global demand and supply shortages.

As stocks around the world struggled in Q2 2022, China A shares produced a positive return, with the CSI 300 Index adding +6.2% for the quarter. This muted number nevertheless belies an action-packed three months, as investor sentiment toward mainland shares reached a low in April, with Shanghai and other major cities entering growth-stunting lockdowns amidst a rapid spread of COVID variants, only to recover sharply in May and June, as easing public health restrictions allowed Beijing to start ramping up a massive stimulus program intended to set the nation’s economy up for a strong second half leading into Q4’s National Congress. Here we offer some perspective on factor drivers in China’s market during the second quarter and comment on what might come next for Chinese stocks.

What will the next era of China’s economy look like? Invest in the leading companies driving China’s New Economy through the Premia CSI Caixin China New Economy ETF.

The recent regulatory crackdowns and power suspension in China have unnerved many international investors. How to configure for opportunities under the lens of common prosperity and China’s commitment for carbon neutrality by 2060? In this article, we compare the Premia China STAR50 ETF (3151.HK) and Premia CSI Caixin China New Economy ETF (3173.HK), and discuss why they are useful implementation tools to capture long term opportunities in hardcore technology and strategic new economy sectors under the 14th Five Year Plan.

The upward momentum of US equities has slowed considerably over the past 16 months, from the explosive initial rebound in late March last year. Our sense is that we would either see small gains in coming months or indeed a correction in the face of the likely peaks in economic growth, earnings growth, and policy stimulus. In this article our Senior Advisor Say Boon Lim discusses why investors in US equities may have to lower their returns expectations for 2H21 in the face of what some are calling the “triple peaks”.

China market saw a material correction due to the regulatory crackdown in the offshore tech and education space. The panic sentiment led to indiscriminative unwinding of Chinese stocks by foreign investors, pushing the HK-listed tech names and the US-listed China ADRs into a bear market technically. Although the regulatory risks remain high in near-term, investors seem getting a stronger hint about the policy direction. The glory days when China tech can be simplistically covered by just the offshore tech giants is gone, and there is increasing need for more granular understanding of the related policy headwinds and tailwinds. In this article our Partner & Co-CIO David Lai shares the thesis behind our Premia China STAR50 ETF, and how this timely launch adds value through its diversified exposure of the leading innovative and strategically important hi-tech companies focusing on innovation and hardcore technology.

We recently completed the annual rebalancing exercise for the two China A shares and Asia Innovative Technology ETFs. In this article our Portfolio Manager Alex and Partner & Co-CIO David will share more about the changes and portfolio characteristics post-rebalancing, which further align with strategic focuses of China’s 14th Five Year Plan, and recalibrate for opportunities in the new normal as COVID recovery in China and Asia enters the next stage.

The term "dual circulation” is one of the hot searches in China and receives great attention after President Xi first expressed this idea at a top official meeting held earlier this year. He then elaborated further that China’s economic model will be involving an internal circulation developing a substantial domestic market, and an external circulation deepening the international trade. The latest meeting of Communist Party’s Central Committee reinforced this policy will be the core component of the 14th five-year plan for the development between 2021 and 2025.

在經歷今年首季度的急劇拋售後，全球股市在近幾個月表現亮眼。這個反彈看似是典型的非理性「大爆發」，因為全球主要經濟體正在或即將進入衰退期，且全球新冠肺炎疫情仍未見緩和之勢；然而，從另一方面而言，這具前瞻性的市場走勢，可能反映出投資者已走出疫情陰霾，整裝以待爭相捕捉股市V型反彈所帶來的投資機遇。中國A股市場既擁有穩健的基本面，又具相當吸引人的估值。因應全球股市下跌，投資者可考慮穩步增持中國A股。本篇文章中，我們將簡述當前市場動態與如何精準捕捉中國A股反彈的增長機會。

CSI 300 outperforms S&P 500, Chinese tech outruns Nasdaq 100. How has China’s new economy sectors including its recently launched “Nasdaq” – the STAR board (Shanghai Stock Exchange’s Science and Technology Innovation Board) – outperformed global indices despite being at the center of a trade-tech war with the United States?

In the midst of a US tech bubble, Chinese and Hong Kong equities have emerged in the sweet spot between valuations, profitability and balance sheet strength.

The international media reckoned a front-page editorial in the China Securities Journal calling for a “healthy bull market” to create “new opportunities in crisis” was responsible for last week’s red-hot run-up in the Shanghai Composite Index. But perhaps there are less “exciting”, but more enduring, explanations for the surge in Chinese stocks.

隨著聯網汽車和智能家電等消費領域的應用日益普及，物聯網（IoT，Internet of Things）已逐漸為人所熟知。而在工業領域，正如我們一再強調與關注的話題——企業數位化轉型將重寫產業遊戲規則，而工業互聯網（IIoT，Industrial IoT）正是其中的重要環節。事實上，工業互聯網即是「中國新基建」七大重點投資領域之一，受到中國官方政策的大力支持。所以，工業互聯網是甚麼？為何其中的行業領導者在疫情期間更具彈性？在本篇文章中，我們將分享工業互聯網的概念，以及該領域的發展進程和投資機會。

Premia CSI Caixin China New Economy ETF performed well and went up by 3% in a down market. In this article, we would like to share with you the reasons behind the strong performance and the comparison of this strategy with the other mainstream indexes that investors usually track in respect to performance attribution, sector allocation, niche thematic exposure and top drivers.