ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • 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 of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. The Responsible Investing Channel
  2. China Reopening Could Assist This EM ETF
The Responsible Investing Channel
Share

China Reopening Could Assist This EM ETF

Tom LydonJan 18, 2023
2023-01-18

Emerging markets equities endured another year in 2022 as the economy in China slumped amid harsh coronavirus restrictions and as major developed market central banks raised interest rates.

Market observers believe both factors will be out the window in 2023, potentially supporting bull cases for exchange traded funds such as the SPDR Bloomberg SASB Emerging Markets ESG Select ETF (REMG B)+. As its name implies, REMG is a broad-based emerging markets ETF that leans into the perks associated with environmental, social, and governance (ESG) investing.

REMG is also a solid idea for investors looking for China exposure without the commitment of a China-specific fund. REMG, which tracks the Bloomberg SASB® Emerging Markets Large & Mid Cap ESG Ex-Controversies Select Index, allocates 36.70% of its weight to Chinese equities, by far its largest country exposure. That’s relevant at a time when experts see China’s reopening fueling economic gains and developed market central banks likely laying off rate hikes in a bid to avoid recessions.

“China is rapidly lifting COVID-19 restrictions. We estimate its economic growth will clock in above 6% in 2023, cushioning the global slowdown as recession hits major DM economies. But China’s growth surge will be tempered by falling demand for its exports as U.S. spending shifts away from goods. We don’t expect the level of economic activity in China to return to its pre-COVID trend, even as domestic activity restarts. We see growth falling back once the restart runs its course,” according to BlackRock research.

It remains to be seen if developed market central banks will be successful in engineering soft landings, but the consensus is building that they will not be, indicating some major markets such as the U.S. could be vulnerable to contraction this year.

That puts some burden on China to pick up the slack for global growth, but that outlook also confirms why some asset allocators are constructive on emerging markets stocks for 2023.

“China replacing the U.S. as the driver of global growth underpins our preference for emerging market equities, including Chinese equities, over DM peers,” added BlackRock.

Beyond China, India is REMG’s second-largest geographic exposure at 14.12%. That’s an important point because equity markets there have been relatively sturdy over the past couple of years, India is Asia’s third-largest economy, and because it could soon surpass China in terms of population. Taiwan and South Korea, traditionally lower volatility markets relative to the broader EM universe, combine for 21.64% of REMG’s weight.

For more news, information, and analysis, visit the ESG Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

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