China Sector Report: Q3 2020

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Q3 2020 China Performance

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. High short-term performance of the fund is unusual, and investors should not expect such performance to be repeated. Returns for periods greater than one year are annualized. For performance data current to the most recent month-end, please call 1-888-493-8631, or visit www.globalxetfs.com.

Dispersion between China and US Sectors Normalizes

In Q3, the MSCI China Large Cap Index and the S&P 500 Index continued to rally, ending the quarter up 11.6% and 8.9%, respectively.

During Q3, Chinese sectors for the second time this year exhibited less dispersion of returns compared to US sectors, which deviates from historical patterns. Sector dispersion is the difference between the best and worst-performing sectors in each country. In China, this dispersion was 30.71% in Q3, whereas in the US it was 34.72%.

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Q3 2020 China vs US Sector Dispersion

Comparing and Contrasting the US and China Sector Performance

In the chart below, we show performance of Global X ETFs that are designed to track China’s 11 GICS sectors, as well as their US sector index counterparts.

(Click on image to enlarge)

Q3 2020 China vs. US Sector Performance

Performance shown is past performance, based on the returns of the indexes that the sector ETFs track and do not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted.

Consumer Sectors Drive Performance

During Q3, the Consumer Discretionary, Materials, and Consumer Staples sectors outperformed their broad market indexes in both China and the US as consumers became encouraged by a recovery as economic activity increase and jobs restored. Within consumer sectors, e-commerce companies contributed positive gains in both countries with consumers increasing their reliance on online platforms to make personal purchases and order home food delivery amid tenuous reopening efforts.

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Disclosure: The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate ...

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