Is China a bear market opportunity?
China’s stock market pullback this year has been in line with the average annual drawdown; historically, this volatility has tended to produce double-digit annualized gains.
The recent drop seems to be driven by a regulatory crackdown, not an economic slowdown, with the market not responding to the economic outlook, but to the policy uncertainty.
Regulatory reform may continue, but the market’s reaction may be overdone.
We have been adding to China funds and EEM past few wks