Gaining exposure to China
The New Zealand share market is small and most prudent investors include international shares as part of a balanced portfolio.
American, Australian, and European companies feature strongly in diversified holdings. The names and products of these companies are often very familiar (think Google, Apple, BHP and BMW) and the corporate governance in these countries is similar or better than New Zealand’s.
China and Chinese companies do not figure to the same degree or perhaps not at all in local investor’s portfolios, despite the superpower having the World’s second largest economy and consistently strong GDP growth.
The risky nature of Chinese stock markets and a lack of transparency around governance are some of the reasons given for by passing the global giant. There is also the practical issue of how do you invest directly in Chinese stocks.
In this interview, Ed Glennie, a strategist with Hobson Wealth Partners discusses the different ways investors can gain exposure to the Chinese economy and its biggest growth stocks.