Chinese equities: even riskier than you think

Some optimists like to believe that if the US does slide into recession, mighty China will act as a counterweight. But Chinese stocks are anything but a safe haven.

During the rout of the past five weeks, the multi-trillion epiphany which struck the rococo temple of modern finance to its very foundations was that a whole stratum of yield-hungry investment monies devoted to what had been marketed as fee-heavy alpha' had, in fact, compressed under its own sheer weight and had undergone a metamorphosis to a dull and highly friable bedrock of disastrously leveraged beta'.

As a result, in general terms, anything which had risen in the heady days to the general peak in late July was left headlong in the dust, while the meek such as that universal whipping boy, the yen may not exactly have inherited the earth, but did at least get a mention in the will.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.