A strong management team and sound investment process underpin iShares MSCI China A ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in liquidity exposure and yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares MSCI China A ETF earns an Above Average Process Pillar rating. The most meaningful contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Strong risk-adjusted performance also supports the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the MSCI China A Inclusion Index composed of domestic Chinese equities that trade on the Shanghai or Shenzhen Stock Exchange.  The fund generally will invest at least 80% of its assets in the component securities of its index and in investments that have economic characteristics that are substantially identical to the component securities of its index. The index is designed to measure the equity market performance in the People's Republic of China and as represented by "A-shares" that are accessible through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program. 

 The portfolio is overweight in industrials and basic materials relative to the category average by 10.2 and 7.0 percentage points, respectively. The sectors with low exposure compared to category peers are communication services and consumer cyclical, underweight the average by 15.5 and 15.5 percentage points of assets, respectively. The portfolio is composed of 524 holdings and is less top-heavy than peers. Specifically, 17.6% of the portfolio's assets are concentrated within the top 10 fund holdings, as opposed to the category average's 36.9%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 26% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

iShares MSCI China A ETF benefits considerably from its team, earning it an Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. The team is well equipped, with an average of 18 years of portfolio management experience. Together, they manage a total of 257 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares MSCI China A ETF

CNYA tracks a market-cap-weighted index of Chinese A-share equities.

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China's near-term challenges and long-term uncertainties are plentiful, but the widespread pessimism towards the Chinese economy and markets feels excessive.

China's Economy Is Not In A Great Decline But A Great Transition

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The PBOC held the 1-year medium-term lending facility (MLF) rate at 2.5% in March. The PBOC remains on a dovish tilt, but depreciation pressure on the RMB limits room for monetary easing in China before global central banks start to cut rates.

PBOC Held Rates Steady In March

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iShares MSCI Emerging Markets ETF

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iShares MSCI Emerging Markets ex China ETF

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iShares MSCI Brazil ETF

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iShares MSCI India ETF

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iShares India 50 ETF

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iShares ESG MSCI EM Leaders ETF

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iShares MSCI India Small Cap ETF

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Emerging markets continued to expand at a solid pace midway into the first quarter of 2024, supported by broad-based expansion across both manufacturing and service sectors.

Emerging Markets Growth Remains Solid Amid Intensifying Inflationary Pressures

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Loncar China Biopharma ETF

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China and Hong Kong markets had a humbling 2023 with equities down more than 10%. Beijing has also begun stepping up tourism and travel promotions, granting visa-free entry to 11 countries, with Singapore and Thailand the latest to be included.

Enter The Dragon: Parsing Lunar New Year Opportunities Among Emerging Markets

China's January CPI inflation was weaker than forecast at -0.8% YoY, which marks the lowest level since September 2009. We expect this to mark the bottom of the current cycle.

China: January 2024 CPI Inflation Fell To The Lowest Level Since 2009, Likely To Mark The Bottom

Why China May Need To Do More To Boost Investor Confidence

The Chinese economy is stabilising, but the only fireworks will come from the new year celebrations, which begin on February 11, as momentum remains weak. China's GDP growth for the fourth quarter rose from 4.9% year-on-year to 5.2%, bringing 2023 full-year growth to 5.2% YoY, exceeding the 5% growth target set at last year's Two Sessions.

China Begins Year Of The Dragon With Weak Economic Momentum

The China Securities Regulatory Commission said it would crack down on “vicious short selling” and other types of market manipulation

China's Steps to Aid Stocks Won't Fix the Problems. Why They're a Positive Sign.

While recent policy announcements and data surprises have generated some optimism, we maintain a cautious stance on China's economic prospects. We believe weak consumption trends, a downbeat labor market and continuing property sector headwinds should all weigh on the economy in the coming quarters.

China Growth Could Slow Amid Limited Policy Options

In response to the recent China equity market rout, policymakers vowed last week to stabilize the market through more forceful measures. Despite a very positive initial market reaction (an 8% rebound in three days), deeper fundamental issues such as deflationary risks and lack of demand remain key concerns for China's economy.

China Outlook: Market Rescue Welcomed, But More Needed

iShares MSCI China A ETF offers exposure to China's market, which has potential for growth but also comes with regulatory and volatility risks. CNYA tracks the MSCI China A Inclusion Index and holds diverse holdings in sectors such as Financials, Industrials, and Tech. CNYA has outperformed other similar ETFs focused on China A-shares, but investors should carefully consider fees, holdings, and performance before investing.

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Investing in China remains a topic of interest, but it comes with a range of challenges and opportunities. While recent policy easing in China is plus, renewed crisis in the property sector is a minus.

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China's government is finally moving to stimulate the economy after its sluggish post-COVID reopening.

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Chinese stock prices have lost money in the 16 years since 2007 and are now back near 2005 levels. Chinese treasury bonds have rallied sharply as beaten-up capital capitulates out of riskier markets and back to the relative safety of government bonds.

China Canary Warns About Global Economy And The Downside To Euphoria

India's potential for economic growth lies in its young population, business-friendly reforms, and technology sectors. To unlock this potential, India needs long-term policies to address structural constraints and short-term infrastructure investments.

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Mainland Chinese economy shows signs of regaining growth momentum in November, with higher output, new orders, and improved business conditions. Business expectations remain below average, leading to job cuts for the third consecutive month.

China PMI Signals Tentative Growth Revival, Prices Edge Higher

PMI data for October showed momentum in China's economy waned following recent improvements in hard activity data. By industry type, most manufacturing sectors experienced a slowdown in growth in October, though for companies that are heavy consumers of energy, activity actually declined slightly, perhaps affected by recent increases in the prices of crude energy.

China: Momentum Waned In October

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The IMF, the World Bank, and the United Nations all rank China and Japan as the second and third largest economies on the planet. More of what is occurring in the markets should reflect what is happening in China and Japan which are strongly linked economically.

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While China's economy is still struggling, it is at least not getting incrementally worse and there are some pockets of improvement. Exports continue to decline in year-on-year terms, but the rates of decline are decreasing.

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As China accelerates stimulus across multiple sectors, its sluggish economy is showing early signs of recovery, boding well for the A-share market. For most of 2023, sentiment toward China's A-share market has been weak.

China Focus: Are Investors Being Too Pessimistic?

While slower growth in China will impact the global economy and financial markets, we think the short-term pain is necessary to avoid bigger problems down the road. China's economy is in the early stages of a long-term transition away from an export-driven, investment-led model toward a more balanced one with more domestic consumption.

China's Growth Is Slowing: What Does It Mean?

CNYA provides access to locally available equities in China, with a focus on financial and industrial sectors. The ETF has exposure to consumer staples and specific companies such as Kweichow Moutai and a lithium-ion battery manufacturer, which may drive secular resilience. But structural risks, including the housing sector and geopolitical tensions, continue to pose challenges for the Chinese economy and the ETF's outlook.

CNYA: Optimism By Market Commentators Is Premature

China's economic performance has been extremely disappointing since the lifting of lockdowns late last year. While diverse, much of the financial stress and deepening economic weakness can be traced back to the malfunctioning property sector.

China's Property Slump Takes Center Stage

Apple

Foreign direct investment (FDI) in China has plummeted to some of the lowest levels seen in the 21st century. China's currency, the yuan, has been depreciating, and confidence in the Chinese economy is declining.

China's Spiraling Economy Could Turn Into The Market's Latest Black Swan

News for iShares MSCI China A ETF ETF (CNYA)