US-China Talks Set In Washington: ETFs In Focus

After several rounds of discussion, the United States and China are set to start fresh talks in Washington today with follow-up sessions planned for Thursday.

In last week’s meetings in Beijing, President Donald Trump said discussions were going "extremely well" and suggested he might extend the Mar 1 truce deadline. The move would stop an immediate increase in tariffs to 25% from 10% on $200 billion worth of Chinese imports that was imposed to address U.S. demands that China curb forced technology transfers and better enforce intellectual property rights.

The fresh talks are aimed at "achieving needed structural changes in China that affect trade between the United States and China. The two sides will also discuss China's pledge to purchase a substantial amount of goods and services from the United States," per the White House. Since the December 90-day truce, China has resumed purchases of some U.S. soybeans and suspended massive buying of American commodities to get U.S. trade negotiators closer to a deal.

Per CNBC, the nearly year-long U.S.-China trade dispute seems to be ending as signals are pointing to a done deal. Based on those signs, China will continue to run large trade surpluses with the United States, and it will never accept Washington-imposed reforms of its trade and industry.

All these development are instilling confidence in stocks, especially the ones that are set to benefit the most from the move. We have highlighted five ETFs that seem to be market movers in the weeks ahead:

VanEck Vectors Semiconductor ETF (SMH - Free Report)

Though the broader technology space is highly exposed to China, semiconductor stocks led the way with Qorvo (QRVO - Free Report) , Qualcomm (QCOM - Free Report) , NVIDIA (NVDA - Free Report) , Micron Technology (MU - Free Report) and Broadcom (AVGO - Free Report) having more than half of their revenues coming from China. As such, semiconductor ETFs like SMH are set to gain from the positive developments in the trade spat. This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. It has higher concentration on the top firm at 12.4% of assets while others hold less than 9% share. The product has managed assets worth $997.1 million and charges 35 bps in annual fees and expenses. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

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