Executive Disorder: Mapping the US Ban On Chinese Stocks

DATA INSIGHT

Executive Disorder: Mapping the US ban on Chinese stocks

Last November, the Trump administration announced a ban on US investors holding Chinese stocks with suspected military links. With little initial guidance on which stocks were covered by the ban, investors were at first left guessing as to how their portfolios would be affected. Over the last few weeks, however, updates from the Treasury and moves by index providers to drop offending stocks have gradually filled in the blanks, leading to an emerging picture of the executive order’s impact on major benchmarks. Despite some big names, like China Mobile and CNOOC, falling on the US government’s blacklist and grabbing headlines, the overall weight of banned stocks at the beginning of 2021 was relatively modest, totaling less than 3% of weight in the average China investor’s portfolio, and concentrated among telecom shares, IT stocks, and industrials.

DOWNLOAD PDF

Important Information

Issued by Rayliant Investment Research d/b/a Rayliant Asset Management (“Rayliant”). Unless stated otherwise, all names, trademarks and logos used in this material are the intellectual property of Rayliant.

This document is for information purposes only. It is not a recommendation to buy or sell any financial instrument and should not be construed as an investment advice. Any securities, sectors or countries mentioned herein are for illustration purposes only. Investments involves risk. The value of your investments may fall as well as rise and you may not get back your initial investment. Performance data quoted represents past performance and is not indicative of future results. While reasonable care has been taken to ensure the accuracy of the information, Rayliant does not give any warranty or representation, expressed or implied, and expressly disclaims liability for any errors and omissions. Information and opinions may be subject to change without notice. Rayliant accepts no liability for any loss, indirect or consequential damages, arising from the use of or reliance on this document.

Hypothetical, back-tested performance results have many inherent limitations. Unlike the results shown in an actual performance record, hypothetical results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under- or over- compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical results in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any investment manager.