The make-up of Hong Kong's benchmark index, the Hang Seng, shows why most emerging markets are considered geared plays on global growth: they are packed with cyclical stocks.
In the Hang Seng's case, economically sensitive industries comprise around 80% of the index. In Western markets, cyclicals usually account for 60% of the market or less. Hong Kong's financials the biggest sector, accounting for almost 60% of the market oil, industrials, and technology firms are in the cyclical category.
Telecoms, utilities and consumer goods (made up of personal and household goods as well as food and drink companies) are defensives.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
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
See Tim Bennett's video tutorial: What is an index?
-
SIPP holders to get cash warnings and be offered default fundsNews Providers will be required to offer investors a default fund and must warn customers of the inflationary risk of cash savings the regulator has said. What the new rules mean for your retirement pot?
-
Zoopla: Asking price discounts hit a five-year high – is now the time to buy a property?
News Zoopla’s October House Price Index shows sellers are accepting discounts of 5.5% on average to secure a sale – we reveal where homeowners are taking the biggest asking price cuts
