Xiabing Su, cultural analyst at KraneShares, interviewed a variety of Chinese investors last month when visiting a brokerage firm in Lanzhou, China. While investors expressed a range of opinions regarding market outlooks, all demonstrated a depth of knowledge about the government’s policy supports of markets. Xiabang conducted the interviews in the wake of the strong market surge and subsequent pullback at the end of September/beginning of October.
The Long-Term Potential Benefits of Policy Support in China
“The government has been releasing policies one after another to stimulate the economy,” a third long-term investor explained. Such policies create an optimistic environment looking ahead. “People will understand that the country’s economy is improving, and more will be willing to invest.”
Such policy support could create a positive momentum cycle whereby everyone benefits. Increasing investors in the market will likely drive prices higher. This in turn benefits companies, allowing them to distribute better dividends while growing. Meanwhile, the economy grows stronger, creating a “win/win situation” according to the long-term investor interviewed.
A final investor interviewed on the street also views the long term as optimistic, despite short-term volatility. While the investor expressed some concerns about the pullback, they think it also creates opportunity. “Right now, it feels like the market value of some companies is inconsistent with their stock prices,” the investor noted. “I remain optimistic about certain companies and I’m still buying more stocks with a long-term investment strategy.”
KraneShares offers exposure to China’s domestic markets through its flagship fund, the KraneShares Bosera MSCI China A 50 Connect Index ETF (KBA ).
KBA invests in China-A shares within mainland China across multiple sectors — specifically those from the MSCI China A 50 Connect Index, and transacts in the renminbi. This fund seeks to capture 50 large-cap companies that have the most liquidity and are listed on the Stock Connect.
It also offers risk management through the futures contracts for eligible A shares listed on the Stock Connect. The index uses a balanced sector weight methodology to give exposure to the breadth of the country’s economy. KBA has a management fee of 0.56% with contractual fee waivers that end 8/01/25.
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