Under the tariff storm, China's domestic consumption becomes the focus. Global X China Consumer Leaders ETF invests in multiple policy-benefiting sectors
In the midst of the tariff storm, China's consumer goods industry has become a defensive sector, with the Global X China Consumer Leaders ETF deriving only 4% of its revenue from the United States. This ETF invests in policy beneficiaries, defensive, and growth sectors. The report shows that GDP grew by 5.4% year-on-year in the first quarter of 2023, with a significant improvement in consumption, as social retail sales increased by 5.9% year-on-year in March. Future assets expect policies to focus on fertility support, consumption vouchers, service consumption subsidies, and trade-in policies to stimulate consumption growth and enhance profit expectations
According to the Zhitong Finance APP, the Future Asset Research Report points out that in the recent tariff turmoil, China's consumer goods industry has gradually become a defensive sector in the market. This is mainly due to its limited direct risks from exports and the increasing market expectations for the Chinese government to accelerate the introduction of policies to stimulate domestic consumption. The Global X China Consumer Leading Brands ETF (02806) launched by Future Asset previously reported that only 4% of its revenue comes from the United States, primarily affecting the home appliance and sportswear OEM industries. At the same time, this ETF also provides a balanced investment portfolio covering policy-benefiting sectors, defensive sectors (such as food), and growth sectors (such as new consumption).
The report mentions that macro data also confirms the resilience of Chinese consumption, with GDP growth in the first quarter reaching 5.4% year-on-year, exceeding the market expectation of 5.2%. The improvement on the consumption side is particularly evident, with social retail sales in March increasing by 5.9% year-on-year, higher than the expected 4.2%. In specific segments, home appliances, furniture, and telecommunications products performed well under the "trade-in" policy.
Future Asset believes that policies may focus on the following areas: 1) Fertility support policies: For example, cash subsidies for new parents in Hohhot may benefit the milk powder and dairy-related industries; 2) Consumption vouchers: Likely applicable to the catering, general retail, and service industries; 3) Service consumption subsidies: Beneficial for tourism, education, entertainment, and housekeeping services; 4) Expansion of the trade-in policy: Continuing to benefit the home appliance, furniture, home decoration, automotive, and consumer electronics industries, with potential expansion to other categories.
In the face of external pressures, market expectations for increased stimulus policies continue to strengthen. Future Asset anticipates that these stimulus policies will promote immediate growth in consumption, further enhance profit growth expectations, and drive the revaluation of the sector. Against this backdrop, the Global X China Consumer Leading Brands ETF captures the recovery opportunities in the Chinese consumer industry through a balanced investment portfolio. This product invests in multiple policy-benefiting sub-sectors (such as OTA, catering, automotive, home appliances), defensive industries with low tariff risks (such as beverages), and rapidly growing new consumption industries (such as trendy toys).
