The companies that list shares in Mainland China are extremely well represented in the global economy. They include the world’s largest battery manufacturer, the world’s largest solar panel manufacturer, the world’s third-largest electric vehicle manufacturer, and one of the world’s leading medical devices companies, among other notable multinationals. However, China’s Mainland equity market is not well represented within global indexes.
Indexes’ lack of exposure to this crucial cross-section of the global economy has placed investors at a disadvantage. Over the past ten years, China’s A share market has outperformed the MSCI China Index and exhibited a lower correlation to US and global equity markets.
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