Market

U.S.-China Trade Tensions Spark Unprecedented Volatility in China ETFs, Investors Warned

U.S.-China Trade War Intensifies Market Volatility

The escalating U.S.-China tariff war, with reciprocal tariffs reaching a staggering 104%, has significantly impacted global financial markets. This economic standoff has not only increased market volatility but also sparked fears of a potential economic slowdown.

U.S. President Donald Trump and Chinese President Xi Jinping. (Photo source: Reuters)

ETFs Face Unprecedented Discount Rates

On April 7, Shinhan Asset Management's 'SOL China Growth Industry Active (Synthetic) ETF' saw its discount rate widen dramatically to -5.96%, a situation exacerbated by the absence of liquidity provider quotes during the closing single price trading session.

Investors Urged to Proceed with Caution

Experts are urging investors to tread carefully as the market faces heightened uncertainty. Kim Min-ki from the Capital Market Research Institute pointed out that the current supply-demand imbalances could lead to further widening of ETF discount rates, potentially resulting in significant losses for investors.