China ETF Hedging Costs at Record Low on Stimulus Wagers
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The cost of hedging against losses in the largest Chinese exchange-traded fund in the U.S. has fallen to a record low on optimism that government stimulus will help sustain growth in the world’s second-biggest economy.
The iShares China ETF rallied for five weeks, gaining 10 percent in the longest streak in a year, while options pricing on the fund is indicating investors are less concerned about future losses. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. rose 2 percent last week for the biggest advance since February.