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International Funds: Third Quarter Wrap-Up

Events in the Chinese market took center stage.

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To anyone following the financial news, it won’t come as a surprise that the performance of China stood out among global stock-market results in 2021’s third quarter. The effect that the September crisis at real estate giant Evergrande Group had on bond markets received the most recent attention, but the third quarter was a turbulent time for stocks in that country as well.

For one thing, Evergrande’s problems stoked fears of a broader property-sector crash, with subsequent effects on the whole Chinese economy. Of more direct impact on China’s stock market were actions by the Chinese government that appeared aimed at well-known technology and communications companies. In addition, the government imposed new rules that led to popular online-education firms having their entire business models effectively wiped out, as the guidelines imposed drastic restrictions on their activities. From July 1 through Sept. 28, 2021, the MSCI China Index plunged 18.6%, with Alibaba’s (BABA) 32.8% decline and Tencent’s roughly 20% loss supplying much of the fuel.

Gregg Wolper does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.