A new survey of 150 European institutional investors and wealth managers with combined assets under management of US$292.8bn highlights the positive sentiment towards Chinese equities.
Three-quarters said they expected foreign investment into the asset class to increase in the first quarter of this year, compared with the final three months of last.
The study was carried out by NTree International on behalf of investment manager China Post Global, which promotes a family of innovative exchange-traded funds (ETFs) providing access to commodities and emerging markets through its brand, Market Access.
The sentiment check recorded some mixed views when it came to the current valuation of Chinese equities.
Some 41% of investors said they represented a fair valuation, while 48% felt that they were slightly overvalued and 9% reckoned they were undervalued.
Bond yields
Asked to rank the most important features of investing in the world’s fastest-growing major economy, 42% cited positive bond yields. Chinese government debt has provided positive returns in a period when G7 yields have collapsed.
Another important factor - highlighted by 30% of respondents to the research - was the “normal economic, monetary, and fiscal policies in China compared to other global economies”.
Some 8% cited positive economic indicators in the market as most important, followed by strong capital growth in Chinese equities (7%) and the fact that the Chinese market has become more liquid (7%).
“Our research shows the positive sentiment towards Chinese equities this year which is being driven by favourable conditions in the market and the fact that China has sustained relatively normal economic and fiscal policies during the global coronavirus pandemic,” said NTree chief executive, Timothy Harvey.
Equities performed 'extremely well'
Danny Dolan, director at Market Access, pointed out that Chinese equities have performed extremely well during the global pandemic, “demonstrating again their low correlation to other major markets”.
“China’s equity market has risen 30% over the past 12 months and continues to attract investment from overseas institutional investors,” he added.
For more information on Market Access and its Stoxx China A Minimum Variance Index UCITS ETF click here