In a notable move reflecting evolving investment strategies, Avantax Advisory Services Inc. has significantly reduced its stake in the iShares China Large-Cap ETF (FXI), an exchange-traded fund focused on Chinese equities. This decision, detailed in its recent Form 13F filing with the Securities and Exchange Commission, highlights a shifting perspective among certain institutional investors regarding their emerging markets exposure.
Avantax, a prominent advisory firm, offloaded a considerable portion of its FXI shares, cutting its position by 21.5% during the first quarter. This reduction involved selling 9,400 shares, leaving the firm with 34,308 shares of the China ETF’s stock. As per its latest filing, the remaining investment portfolio in FXI held by Avantax was valued at $1,230,000, underscoring a strategic adjustment in its holdings.
While Avantax scaled back, other major players demonstrated contrasting investment strategies. Rafferty Asset Management LLC, for instance, dramatically boosted its presence in the iShares China Large-Cap ETF, increasing its position by an impressive 60.6% in the fourth quarter. Rafferty now commands 27,495,080 shares of FXI, a holding valued at $836,950,000, signifying strong confidence in the Chinese market.
Further indicating diverse approaches to asset management in the Chinese equities landscape, Bank of Nova Scotia also significantly raised its stake, surging by 4,286.8% in the fourth quarter to acquire 6,290,029 shares worth $191,473,000. New entrants to FXI holdings included ADAPT Investment Managers SA, with a $33,559,000 stake, and Raymond James Financial Inc., which purchased a new position valued at $19,493,000, showcasing varied portfolio adjustments.
In a similar vein to Rafferty and Bank of Nova Scotia, Allianz Asset Management GmbH also made a substantial commitment, growing its FXI stake by 2,790.6% during the first quarter. Allianz now owns 427,800 shares of the China ETF, valued at $15,332,000, reflecting a considerable influx of capital into this specific emerging markets vehicle.
Analyzing the broader market performance, shares of the iShares China Large-Cap ETF opened at $36.83 on a recent Friday. The fund commands a significant market capitalization of $6.23 billion, coupled with a price-to-earnings ratio of 10.78 and a beta of 0.44. These financial metrics provide insights into the FXI’s valuation and volatility within the global stock market.
From a technical perspective, the FXI’s 50-day moving average stands at $36.85, closely aligned with its opening price, while its two-hundred-day moving average is $35.14. The fund has experienced considerable fluctuation over the past year, with a 1-year low of $24.59 and a 1-year high of $39.14, demonstrating the dynamic nature of Chinese equities.
The iShares China Large-Cap ETF itself is designed to mirror the price and yield performance, before fees and expenses, of the FTSE China 25 Index. This objective positions FXI as a key vehicle for investors seeking broad exposure to large-capitalization companies within the Chinese market, offering a diversified approach to international investments.
The fund’s diversified portfolio spans several key economic sectors, providing a comprehensive representation of the Chinese economy. These sectors include Financials, Telecommunication, Oil & Gas, Technology, and Consumer Goods, ensuring a broad exposure for investors interested in the fundamental components driving growth in this significant emerging market.
