How to Use ETFs to Invest in the Bull Market
Market sentiment was high as Hong Kong stocks and Chinese assets continued to rise recently, with many investors worried that they would not be able to “get on board” in time. In such a market environment, buying an investment exchange-traded fund (ETF) directly becomes a very practical option. ETFs not only offer the advantage of diversified investments, but also effectively track the performance of Chinese assets, allowing investors to seize opportunities in the bull market.
Why choose an ETF?
1. DIVERSIFIED INVESTMENT: MANY INVESTORS KNOW WHAT THE BENEFITS OF DIVERSIFIED INVESTING ARE, BUT HOW IT ACTUALLY WORKS, WE'LL TALK ABOUT TODAY. In the bullish bull market, the most common investor fears have recently been that companies will not make high dividends after the stock price rises (which was one of the reasons for yesterday's sharp fall), and the strategy of buying ETFs can effectively reduce some of the wind caused by the underperformance of a single company. Insurance. For example, if an individual company makes a dividend in a bull market, this may affect that company's share price, but a diversified portfolio of ETFs can mitigate this effect.
2. Good traceability: Many ETFs are focused on specific markets or industries and can accurately track the performance of relevant indices. This makes it easy for investors to participate in the growth of Chinese assets without the need for in-depth research on each company. ESPECIALLY IN THE CURRENT MARKET, WHEN TRACKING HIGH-BETA STOCKS, ETFS CAN EASILY HELP INVESTORS REDUCE CONCERNS ABOUT A SINGLE HIGH-BETA STOCK (HIGH BETAS ARE GENERALLY HIGH-RISK STOCKS, SUCH AS RECENT STRONG MERGERS, BUT MANY ETF MAJORS ARE STILL VERY HIGH)
Popular Midstream ETFs
In the current market, there are several popular Midstream ETFs worth paying attention to, including:
– $Direxion Daily FTSE China Bull 3X Shares ETF(YINN.US)$ : It is an ETF based on Chinese large-cap stocks and is a leveraged ETF that offers 3x returns. It is especially suitable for those investors who want to increase market performance.
– $Invesco China Technology ETF(CQQQ.US)$ : Focused on Chinese tech stocks, this ETF provides direct exposure to the tech industry, and the potential of the ETF cannot be underestimated as Chinese tech companies continue to grow.
– $KraneShares CSI China Internet ETF(KWEB.US)$ : THIS ETF IS FOCUSED ON CHINESE INTERNET COMPANIES, AND WITH THE ACCELERATION OF DIGITALIZATION, KWEB HAS GAINED ATTENTION IN THE MARKET AND IS A GOOD CHOICE.
– $Direxion Daily CSI 300 China A Share Bull 2X Shares(CHAU.US)$ : This is a 2-2 leveraged ETF based on the Hang Seng 300 index that offers the opportunity for upside action, suitable for those investors who are watching the market.
– $Direxion Daily CSI China Internet Index Bull 2x Shares ETF(CWEB.US)$ : An e-commerce and Internet services company focused on China, the outlook for this ETF is quite optimistic due to the rapid development of e-commerce.
These ETF companies basically include popular stocks that everyone is familiar with. For example: $BABA-W(09988.HK)$ $TENCENT(00700.HK)$ $MEITUAN-W(03690.HK)$ $XIAOMI-W(01810.HK)$ $JD-SW(09618.HK)$ $XIAOMI-W(01810.HK)$ $BIDU-SW(09888.HK)$ $BILIBILI-W(09626.HK)$ $WB-SW(09898.HK)$ $PDD Holdings(PDD.US)$ $KE Holdings(BEKE.US)$ $KUAISHOU-W(01024.HK)$ $CITIC SEC(06030.HK)$ $Kweichow Moutai(600519.SH)$ $WUXI BIO(02269.HK)$ $LI AUTO-W(02015.HK)$ $XPENG-W(09868.HK)$ $NIO-SW(09866.HK)$
(There are many more, but the writer has limited memory. Details can be seen, individual ETF->Analysis->Ingredients)
Newly Listed ETF: DRAG
Of the many ETFs, more than one has recently been listed as the market has turned better $Roundhill China Dragons ETF(DRAG.US)$ 。 DRAG'S MANAGEMENT COSTS ARE RELATIVELY LOW, WHICH ENABLES LONG-TERM HOLDERS TO REDUCE COSTS AND EARN HIGHER RETURNS. IN ADDITION, DRAG'S PORTFOLIO INCLUDES SEVERAL CHINESE COMPANIES WITH HIGH GROWTH POTENTIAL, WHICH IS AN IDEAL CHOICE FOR INVESTORS LOOKING TO PARTICIPATE IN CHINA'S ECONOMIC RECOVERY..
Given the current high volatility of Hong Kong stocks and Chinese assets, choosing ETFs as an investment vehicle is a sensible decision. ETFs not only offer the advantage of diversified investments, but also allow investors to seize opportunities in the bull market, and leverage ETFs to enjoy potentially high returns. For example, a writer at the NOW financial desk in Hong Kong yesterday suggested investing in a HK$7200 ETF as a mid-term long line investment. If investors go further, they can even consider 7226 as a target.
conclusions
In fact, ETFs listed in Hong Kong and listed in US equities are not very different in nature. But the advantage of ETFs on the U.S. stock market is that they can trade close to 24 hours. In the current volatile market conditions, overnight trading functions have also become crucial for short-sighted investors. For example, yesterday's US equity ETF peaked at around 0910am and may also bounce back at noon. So there are different types of ETFs, and the most important thing for investors is to find an ETF that suits their preferences and types.
For progressive investors, the greatest benefit of buying ETFs is to efficiently increase returns on leverage (more aggressively buying leveraged ETFs, but investors need to be aware of the risks involved).
Last but not least, the Chinese shareholders' discussion of A-shares has been very intense recently. Recent A share-related ETFs have become more gambly-oriented as A-shares remain closed until October 7, if you follow some of the big stocks, such as the FTSE A50 or the Shanghai Deep 300 index, but there are some who follow the Schip board ETFs should be careful to track errors. After all, during the A stock market close, a market maker may experience errors in the event of a lack of liquidity. The market is currently betting on the post-market performance of A shares, so investors in A-share ETFs need to understand the risks involved.
Chief Analyst of Futu Securities Liang
(The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the Proposed Share Issuer)
