ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. China Insights Channel
  2. Lydon Talks China’s Economy and Rising COVID Numbers
China Insights Channel
Share

Lydon Talks China's Economy and Rising COVID Numbers

Evan HarpDec 29, 2022
2022-12-29

VettaFi vice chairman Tom Lydon appeared on Yahoo Finance’s “ETF Report” to discuss China’s reopening and the surging COVID outbreak that could threaten everything.

“The zero-COVID policy did not help their economy, didn’t help the markets at all over there,” Lydon posited, noting that the KraneShares CSI China Internet ETF (KWEB B) was down 80% over just a couple of months. Since bottoming out, however, KWEB has soared up 70%. Lydon continued, “You talk about generational opportunities, when you look at companies that have spent a lot time in China, you’ve got a lot of stocks with P/E ratios in the single digits — something we haven’t seen in decades.”

Lydon sees a rebound as being likely, with the saber-rattling about China being largely overblown. “Xi isn’t going to disconnect from capital markets,” he said.

COVID Case Count Climbs, Could Create Catastrophe

The recovery in China could take some time to materialize, and that recovery is potentially threatened by surging COVID numbers. Lydon cautioned that just because the country has reopened, it doesn’t mean that lower lows are impossible. “The China economy is in tough shape; however, the big word for 2023 is diversification,” Lydon countered. “We in the U.S. tend to have a home country bias.”

Though having more allocated to U.S. companies has worked well since the financial crisis, Lydon expressed that it’s worth diversifying into other areas. “We know historically when it doesn’t feel good in your stomach, usually it means there are opportunities ahead.”


Content continues below advertisement

Emerging Markets Questions

Asked if investing in a broader emerging market fund might be wiser than investing in China, Lydon noted, “Just by the sheer amount of companies in the market capitalization in emerging markets, China is just going to dominate.” Broader emerging markets funds are going to be exposed to China simply due to its heft, but Lydon said there are workarounds, including single-country ETFs such as the iShares MSCI Turkey ETF (TUR A-), which is up 93% on the year.

The big thing dragging down emerging markets in 2022 was the robust dollar, which maintained a surprising amount of strength throughout the year. “We may see a reversal in the dollar when markets finally settle,” Lydon noted.

2023 Might See ETFs Surge Even More

ETFs continue to become the wrapper of choice, having seen their second-biggest year of flows in 2022. Lydon sees this as likely to continue. “You’re seeing more money continuing to shift over to ETFs that tend not to, at all, have capital gains distributions.” If more ETF proliferation breaks into 401K plans, that could be “doomsday” for the mutual fund, Lydon observed.

For more news, information, and strategy, visit the China Insights Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X