What Can Hong Kong Stocks Do For Your Portfolio?

Hong Kong stocks jumped 9% on Wednesday, signaling their best day since 2008, after China's top policymaker assured markets of stability and support and helped put a floor under sectors hurt by a regulatory crackdown, Reuters reported.

Vice Premier Liu He said Beijing would roll out support for the Chinese economy as well as be cautious with measures for capital markets, Reuters reported.

Liu was cited by the Xinhua news agency as saying, at a meeting of the Financial Stability and Development Committee under the State Council, that regulators would coordinate better with their counterparts in Hong Kong.

Investors can gain exposure to Hong Kong with the SmartETFs Asia Pacific Dividend Builder ETF (ADIV), which offers global exposure to high quality companies. The fund invests in equities of companies domiciled in China, Taiwan, Hong Kong, Australia, Singapore, the U.S., South Korea, Thailand, Malaysia, and India, according to ETF Database.

ADIV has earned the Morningstar Quantitative Rating of Gold due to strengths including its sizable cost advantage of competitors, the management team’s considerable industry experience, and high quality exposure.

This strategy tends to hold smaller, more value-oriented companies compared with its average peers in the Pacific/Asia ex-Japan Stock Morningstar Category, according to Morningstar.

Analyzing additional factors, this strategy has consistently low exposure to momentum stocks. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so and those that have recently underperformed will keep lagging, according to Morningstar.

The strategy has a position favoring high-quality stocks, which could contribute to higher downside risk protection. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets, according to Morningstar.

Additionally, the portfolio managers have shown an underweight risk tilt, demonstrated by low volatility exposure.

For more news, information, and strategy, visit the Dividend Channel.

Read more on ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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