Qi’s Risk Model attributes return & risk between macro vs. idiosyncratic / specific forces

The CSI 300is up +4.7% YTD. The make-up:

-         +10.2% Macro

-         -5.5% Idiosyncratic

The dominant macro propellers of that return:

-         +3.8% Copper

-         +1.2% USDCNH

-         +1.0% China CDS

-         +0.9% US HY Corporate Credit

-         +0.6% China GDP

-         +0.6% USD TWI

In others words, and perhaps no surprise, investing locally in China today is a punt on macro.

And nota bout a fundamental better opportunity set in anticipation of RoW fiscal stimulus / Deepseek news…

Currently the macro momentum has been strong, but be mindful of the macro risks if you are tempted to chase.

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