MCHI and FXI are two popular exchange-traded funds for China exposure
No exchange-traded funds (ETF) have had a week quite like iShares MSCI China ETF (MCHI) and iShares China Large-Cap ETF (FXI). In the last week, a host of stimulus measures out of China have sent U.S.-listed stocks from China soaring.
On Sept. 20, China’s central bank lowered interest rates and injected much-needed liquidity into its banking system. Major cities Shenzhen and Shanghai lifted home purchase restrictions that had hampered the real estate market. And on Tuesday, the People’s Bank of China’s cut the medium-term lending facility rate by 0.3% to 2%. More measures are expected to be announced heading into Oct. 1, when the new fiscal quarter starts.
At last check, MCHI was up 2.2% to trade at $51.20, earlier hitting its highest level since March 2023. FXI was last seen 1% higher to trade at $32.18, and earlier hit an 18-month high of $32.44. Both MCHI and FXI are heading for respective weekly wins of 20% and 18%, their best weekly performances on record.
MCHI had a solid floor at $40 heading into this week; the area contained pullbacks in August and September. In a similar setup, FXI has support in place at its 200-day moving average, which coincides with the $25 mark. Year-to-date, MCHI and FXI boast gains of 25% and 34% respectively, but given their weekly performance, its clear both have lagged for the most of 2024.