GMO Distances Itself From China With New ETF

This fund aims to provide investors with an innovative way to navigate the evolving economic landscape. It does so by focusing on regions and sectors benefiting from the strategic move away from China.

According to Arjun Divecha, the founder of GMO Emerging Markets Equity, this trend could mark the beginning of a multi-year — potentially multi-decade — transformation.

“This isn’t just about avoiding China – it’s about identifying the countries, sectors, and companies that are benefiting from this secular shift in global supply chains,” said Divecha. 

BCHI offers investors an opportunity to tap into the themes driving this shift. Themes include nearshoring (the relocation of manufacturing closer to home markets) and market share gains by competitors to Chinese companies. They also include the expansion of sectors like electric vehicles and renewable energy. 

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The fund will also focus on countries that are benefiting from this shift. That includes Vietnam and Mexico, where industrial real estate and port infrastructure are booming. Additionally, it will target India’s growing tech services sector and Southeast Asia’s expanding consumer market. Those are poised to see substantial growth as global supply chains diversify.

GMO’s existing ETF lineup includes the GMO U.S. Quality (QLTY B+), GMO International Quality (QLTI ), GMO U.S. Value (GMOV ), and GMO International Value (GMOI ), and the firm is also planning the upcoming launch of the GMO Systematic Investment Grade Credit (INVG) ETF.

With an expense ratio of 0.65%, this ETF offers a timely opportunity for those looking to position themselves in countries and industries that are increasingly distancing themselves from China’s dominant role in global supply chains.

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