The Chinese stock market is not going through its best times and, although few Spanish retail investors are positioning themselves in this market through shares, there are some through shares. global emerging equity fundswhich have historically had significant weight within the Asian giant, and saw their profitability reduced over the year, on average, to 4.66%according to Morningstar data, taking into account vehicles marketed in Spain in its category in euros. This correction of the CSI 300, the stock exchange that groups together companies listed on the Shanghai and Shenzhen stock exchanges, also weighs heavily on the MSCI Emerging Markets, the index that groups together developing countries. So much so that the difference in profitability between this index and the MSCI World (the selective which brings together companies from the 23 most developed economies in the world) This is the largest since the beginning of the year, up to eight points, with an annual increase of 3.8% for the emerging stock market compared to the 12% accumulated by the global stock market in 2024.
The CSI 300 is currently close to its five-year lows, after suffering an annual decline of more than 7%. This correction represents a sharp deterioration in the performance of the emerging stock market, because, although its size has decreased within this index over the years, China continues to be the country with the greatest weight in it, with 24.4% of the total, with MSCI data updated at the end of August. Behind the land of dragonsThe Indian stock market is the largest within this benchmark, with 19.9% of the weight, followed by that of Taiwan, with 18.8%.
Although the MCSI World has performed better since the beginning of the year, in a year that has generally been favorable to equities, the difference between the two stock markets has not been as great as it has been so far in these nine months. And although the first half of the year was marked by the elections that took place in some emerging countries (with the volatility that usually appears in election periods), these markets have not lost their attractiveness, and both the main Taiwan Stock Exchange, like the Indian benchmark (Nifty 50), have reached historic highs this year.
The Indian stock market actually hit that high just a week ago, in a year in which the economy has emerged as the undisputed leader of emerging markets, taking advantage of China’s weakness to take its place as Asia’s economic engine. In 2024, the Nifty 50’s balance is 14.5%, two and a half points below the revaluation of the Taiwanese index, which is holding at 17% annually after the sharp corrections suffered by some investors. heavyweights of the index, such as Taiwan Semiconductor Manufacturing, with a price weighed down by the setback of Nvidia, which has infected the global chip sector.
The flight of flows from China to new countries first swords like India do not depend solely on geopolitical factors, such as the trade cold war with the United States. The country’s real estate crisis continues to be the main concern for investors, along with heightened fears of rising deflation risk and diminishing hopes for economic recovery in the face of weak domestic demand.
The unexpected interest rate cut by the Bank of Beijing in July to boost the economy has so far failed to bear fruit. In fact, Chinese President Xi Jinping urged policymakers a few days ago to focus on combating deflationary pressures. “Overall, we are facing the problem of weak domestic demand, especially on the consumption and investment side. Therefore, proactive fiscal policy and accommodative monetary policy are needed,” he said at the Bund summit in Shanghai.
Despite the strong corrections suffered by the main stock exchanges of the countries included in the MSCI World during the summer months, the profitability of the year continues to exceed double digits in cases such as the S&P 500, the main American index, which gained almost 14% in the year. In terms of weight, the weight of the stock market of the largest economy in the world is the largest within the global stock market, with 66%. Japan would be the second largest, with 7%, in a year in which, despite the fact that the Nikkei recorded its second worst day in its history last August (after fears of recession in the United States), its annual increase reached 6.44%. The French market, with a weight of just over 3%, is the only one in negative territory this year among the developed economies, with a drop of around 1.6%.
The upside potential that experts are collecting Bloomberg The stock market estimate for developing countries is 23%, compared to 14% that the global stock market is maintaining for the next 12 months.
The most and least profitable funds in this category
Among the emerging global stock funds marketed in Spain, the vehicle Fidelity FAST Emerging Markets E-ACC-EUR, Fidelity International’s fund is the most profitable, with 14.8% per year. The Lazard fund Lazard Developing Markets Eq A Acc EUR comes next with 12.07%. GS EM EQ Inc-X Cap EUR; Allspring (Lux) WW EM Eq Inc IEUR Acc; GQG Partners Emerging Mkts Eq A EUR Acc And East Capital Global EM Sustainable A EUR They would be behind schedule, with 2024 yields of just over 11%, according to Morninstar data (see chart).
JPM Global EM Rsr Enh IdxEq C (acc) EURby JP Morgan, It is on the other side of the table that the global emerging stock market fund in its euro category lost the most over the year, with 11.59%. Another Fidelity vehicle takes second place, the Fidelity Sustainable EM Eq A-Inc-EURwith losses of 5.71% in 2024. Pollen Capital Em Mkts Gr W EUR Acc, of the manager Polen Capital Management, is the third in this category which has lost the most during the year, with losses of 4.64%.
