Institutional money has been shifting to the FXI (iShares China Large-Cap ETF) and KWEB (KraneShares CSI China Internet ETF) markets in 2025 for a number of reasons:
- Economic Recovery in China: China’s economy has shown signs of recovery, including several measures to boost economic growth, attracting investors looking for growth opportunities.
- Valuation Opportunities: After a period of underperformance, Chinese stocks have become attractively valued, drawing institutional investors seeking higher returns.
- Diversification: Institutions are diversifying their portfolios to include more international exposure, particularly in emerging markets like China.
- Technological Growth: The technology sector in China continues to grow, and ETFs like KWEB provide exposure to this dynamic market.
Here we can see a technical chart of both China Large Cap ETF (FXI) and China Internet ETF (KWEB) starting to outperform against the All Country World Index (ACWI) – an ETF that tracks the investment results of large and mid-capitalization equities of developed and emerging markets:
…and specifically, China Large Cap (FXI) and China Internet (KWEB) starting to outperform the S&P 500 (SPY):
These combined factors have made the FXI and KWEB markets attractive to both institutional and retail investors as we move further into February and potentially throughout the rest of 2025.
These are a couple of China-focused ETFs that offer a lot of opportunity.
And there are plenty of other ETFs out there that you can rotate into when you have the right strategy!
Happy Trading!
