China may struggle to attract investors again this year.
Mike Akins of ETF Action sees the challenges tied to the country's ability to generate stock market profits.
“It's like the old cliché: Fool me once, shame on you, fool me twice, shame on you,” the firm's founding partner told CNBC's ETF Edge this week. “China's economy expanded, but the stock market wasn't going anywhere. It was very volatile. There were periods of big gains and times of big declines.”
Emerging market products, excluding China, are among the largest inflows of any ETF that Action sees, Atkins said.
“When you go to that market, you have to think about a whole new set of problems,” he says. “Is it worth the investment from a total return perspective? Or is it really just a growth story in the economy rather than the actual return of the stock market?”
David Mann of Franklin Templeton Investments points to another issue that is holding investors back.
“Geopolitics with China is certainly on everyone's mind,” said Mann, the company's global head of products and capital markets. “China was down last year, and it's down again this year. Investors are probably focused on the political side.”
The Hang Seng Index has fallen more than 6% this year and nearly 30% in the past 52 weeks.
