Chinese stocks rallied sharply in the final days of September, spurred by new stimulus proposals, including support for the troubled real estate industry and plans from the People's Bank of China to cut rates . The rally continued on Monday, with the CSI 300 index surging more than 8% for its best day since 2008 . As a result of that excitement, China ETFs are dominating the list of top performing funds in September, according to FactSet.
The iShares MSCI China ETF (MCHI) was up about 22% on the month, while the KraneSharesCSI China Internet ETF (KWEB) was up more than 32%. KWEB 1M mountain KWEB is one of the top performing non-levered ETFs in September. Other top performers include the Global X MSCI China Consumer Discretionary ETF (CHIQ) and the Invesco Golden Dragon China ETF (PGJ) , with September gains of roughly 32% and 30%, respectively.
However, the Chinese market has seen bursts of excitement before, and they haven't always been kind to investors. China has been a long-term underperformer of both the U.S.
market and some broad measures of global stocks. And the drawdowns in particularly have been bad. Since 1992, the MSCI China Index has seen a drawdown of nearly 30% on average every year, according to Strategas, which is more than double that of the S & P 500.
The MSCI China Index's total annualized return during that period is under 1%. Because investors tend to pile into Chinese stocks when the sector is hot, the performance for China ETFs looks even worse when vi.
