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China Evergrande Exposure in iCM Portfolios

Our team has received a number of inquiries, regarding the negative news surrounding Chinese real estate developer, China Evergrande Group (Evergrande). More specifically, our clients and advisor partners have inquired about the degree of Evergrande exposure (if any) that exists across our investment portfolios.

While our portfolios are by no means insulated from the volatility that today’s news has caused across global equity markets, we can confidently say that our direct exposure to Evergrande is near zero. The company represents a weight of just 1 bps in the benchmark MSCI Emerging Markets index and an equally small position in the emerging markets mutual funds and ETFs that we utilize in client portfolios. It’s also worth noting that iCM’s emerging markets equity exposure leans heavily in favor of value, which naturally leads to a sizable underweight in Chinese stocks compared to the core MSCI index.

Looking ahead, we continue to closely monitor this situation, but being valuation-focused investors, we’ve seen little change in the long-term fundamental case for emerging markets equities and fixed income.

Integrated Capital Management, Inc. is an SEC Registered Investment Advisor. Registration does not imply any certain level of skill or training. This post is intended solely to report on various investment views held by Integrated Capital Management. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer or recommendation to purchase or sell a security.

Past performance is no guarantee of future results. Please note that investments in foreign markets are subject to special currency, political, and economic risks. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.