Chi­nese in­vestors warm­ing up to US

China Daily (Canada) - - ACROSS AMERICAS - By PAUL WELITZKIN in New York paulwelitzkin@chi­nadai­lyusa. com

As more Chi­nese com­pa­nies set up shop in the US, Chi­nese in­vestors are ea­ger to fol­low those com­pa­nies into Amer­i­can cap­i­tal­ism by in­vest­ing in US stocks, ob­servers said.

Not­ing that in­vest­ment di­ver­sity is con­sid­ered an ad­mirable goal by many pro­fes­sion­als, Chi­nese in­vestors see US shares as a good hedge for their port­fo­lios, and now thanks to the In­ter­net, the process of open­ing an ac­count to buy and sell US stocks is also rel­a­tively easy.

“Peo­ple who want to di­ver­sify their in­vest­ments seek US stocks,” Jack Liu, se­nior vi­cepres­i­dent of Chardan Cap­i­tal Mar­kets in New York, told China Daily. “I be­lieve a lot of Chi­nese in­vestors are be­tween 30 and 40 years old and many have a West­ern ed­u­ca­tion. They think they un­der­stand US mar­kets and are familiar with it be­cause they may have lived in the US at one time.”

He said many Chi­nese in­vestors who ac­quire US stocks are high net-worth in­vestors. “They will use a US bro­ker­age like Mor­gan Stan­ley to open an ac­count,” he said.

John Liu, no re­la­tion to Jack Liu, is the founder and CEO of Firstrade Se­cu­ri­ties Inc, in Flush­ing, New York. Af­ter work­ing for US bro­ker­age Mer­rill Lynch, he started Firstrade in 1985 and in 1997, he opened an on­line bro­ker­age.

He de­scribes the typ­i­cal Chi­nese in­vestor in US stocks at his firm as those who were born af­ter 1980 or even af­ter 1990.

“Many of them are em­ployed by a tech­nol­ogy com­pany and they may have come to the US in the last 10 years or so. They are very tech savvy. The males slightly out­num­ber the fe­males and most are up­per-in­come in­di­vid­u­als,” he in­ter­view.

Most Amer­i­cans pre­fer to use a pro­fes­sion­ally man­aged mu­tual fund or ex­change-traded fund (ETF) for their stock in­vest­ments, John Liu said, but Chi­nese in­vestors pre­fer to in­vest in in­di­vid­ual com­pa­nies.

“In­vestor par­tic­i­pa­tion in the in­sti­tu­tional level with a mu­tual fund or ETF is very low for Chi­nese in­vestors,” he said. “They don’t think about mu­tual funds or ETFs. They want to in­vest in Chi­nese com­pa­nies that are listed in the US like Alibaba and Baidu. They are familiar with the com­pany and the brand.”

Not­ing that most Chi­nese in­vestors in US stocks now are up­per-in­come in­di­vid­u­als, John Liu ex­pects mu­tual funds and ETFs to gain pop­u­lar­ity with Chi­nese clients in the fu­ture.

“As the mid­dle class grows, the trend will be to use more mu­tual funds and ETFs,” he said.


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