“Investors are about to buy billions of dollars in mainland Chinese stocks even as trade tensions whipsaw markets.
“Two of the largest global index providers, MSCI and FTSE Russell, will soon begin ratcheting up exposure to companies listed on China’s domestic exchanges. The increases will force asset managers to purchase shares of Chinese companies in order to match their changing benchmark.”
I wonder how many investors realize that they are about to increase their exposure to China in the middle of a trade war, simply because the index compiler changes things up?
If you own any Emerging Market ETFs, that’s exactly what’s going to happen, whether you like it or not.