Key Facts from the United SSE 50 China ETF Financial Report for FY Ending June 30, 2024
Financial Performance
- Fund NAV: The net asset value (NAV) of the United SSE 50 China ETF fell by 2.82% in Singapore dollar terms for the financial year, compared to a 1.02% fall in its benchmark SSE 50 Index.
- Dividends: While defensive dividend plays in high-dividend stocks were mentioned, the report does not specifically state that the ETF itself is providing any dividends.
- Economic Overview: China’s market saw improvements in early 2024 due to incremental easing measures, though challenges arose due to market concerns about the property sector and local government policy implementation.
Fund Strategy & Outlook
- The ETF strategy focuses on two main investment themes:
- Central state-owned enterprises and dividend plays with solid cash flow.
- Artificial intelligence (AI) supply chain investments.
- Investor Concerns:
- Geopolitical risks, which could restrict trade access for Chinese companies.
- China’s property market and macroeconomic recovery, as well as potential negative impacts from the US interest rate trajectory.
Special Actions or Initiatives
- Focus on Shareholder Returns: Chinese companies are being encouraged to raise dividends and initiate share buybacks to increase return on equity (ROE), which could restore market confidence.
Date of Report & Financial Year
- Report Date: September 20, 2024.
- Financial Year: Ended June 30, 2024.
Recommendations for Investors
If You Currently Hold the Stock
- Recommendation: Hold. The ETF’s strategic focus on dividend plays and state-owned enterprises with solid fundamentals offers some defensive value during macroeconomic uncertainty. Additionally, the long-term prospects of China’s artificial intelligence supply chain investments remain promising.
If You Do Not Hold the Stock
- Recommendation: Consider purchasing if you have a high-risk tolerance and a long-term investment horizon. The fund is well-positioned in key industries, and if China’s macroeconomic policies strengthen, there could be growth potential.
Disclaimer
These recommendations are based on the financial report for the period ending June 30, 2024, and do not consider external factors beyond what was stated in the report. Investors should conduct further research and consult with financial advisors before making investment decisions.
