Examining Factor Performance Against Weakness In The Chinese Yuan

Examining Factor Performance Against Weakness In The Chinese Yuan by Nick Kalivas, Invesco

Low volatility, quality outperformed when yuan under pressure

China has dominated market headlines early in the new year, with weakness in the Chinese yuan – also known as the renminbi – unnervering investors and leading to a sharp sell-off in US equities. The Chinese economy can often be difficult to gauge, and the country’s stock market is inherently unstable. Economic news is generally opaque and the Chinese government actively intervenes in the markets – making investing in China often feel like a roll of the dice. There doesn’t even have to be a direct link between the equity market and the economy. After all, stocks aren’t gross...