Reviewing the global equity market as a single portfolio reveals a sleepy affair for year-to-date results through yesterday’s close (Aug. 10). But slicing and dicing shares into the major equity regions reveals a more dramatic story, including a strong lead for China’s stock market, based on a set of exchange-traded funds.

The iShares MSCI China (MCHI) is ahead by 12.6% year to date. That’s well above of the second-best regional performer – US stocks. MCHI’s leading return is even further ahead of global shares overall, which are only fractionally higher so far in 2020.

China’s leading performance has unfolded amid rising tension with the US this year. Geopolitical stress between the two nations continued to rise this week after China unveiled retaliatory sanctions on 11 US citizens including legislators yesterday. The announcement followed last week’s US sanctions on 11 Hong Kong and Chinese officials after Beijing curtailed political freedoms in the former British colony.

If investors are worried about deteriorating US-China relations, it’s not obvious in the broad trend for Chinese stocks – at least not yet. Although MCHI has been trading moderately below its previous high (Jul. 9), the bullish bias of late remains intact.

US shares are this year’s second-best performer for the major equity regions. But the 5.4% year-to-date return for SPDR S&P 500 (SPY) remains well behind MCHI’s 2020 performance Nonetheless, SPY’s rally in recent months endures. In fact, the ETF took out its previous high yesterday and closed at a record (the fund’s underlying index, the S&P 500, is still slightly below a record close as of Aug. 10).

“Markets are looking forward to better days ahead,” advises Jeff Buchbinder, equity strategist at LPL Financial, in a research note. “Although the timing is uncertain, the stock market is expressing confidence that the pandemic will end eventually with a vaccine—or multiple vaccines—and with help from better treatments in the interim.”

World equities, by comparison, are essentially flat this year. Vanguard Total World Stock (VT) posted a slight 0.8% year-to-date gain at the end of Monday’s trading.

Unimpressive, except if you compare the trifling advance to the worst regional performer for 2020: iShares Latin America 40 (ILF) has lost a steep 31.7% so far this year.

In fact, six of the nine ETFs representing equity regions are nursing losses. Nonetheless, some analysts see value in Latin America’s battered shares.

“Latam is more exposed to commodities, where the commodity team’s generally bullish outlook should be supportive,” Citigroup analysts advised at the end of July. “In contrast, MSCI Asia is mostly tech,” the strategists observed. “We go long Latin America versus Asia equities.”

Despite the dominance of red ink for year-to-date results, upside momentum overall continues to recover, based on profiling all the regional funds listed above. The profile in the chart below is based on two sets of moving averages. The first measure compares the 10-day average with its 100-day counterpart — a proxy for short-term trending behavior (red line). A second set of moving averages (50 and 200 days) represent an intermediate measure of the trend (blue line). Using data through yesterday’s close shows that medium-term momentum is rebounding after a previous surge in the short-term trend.