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Commentary

How Exposed Is Your Fund to China?

The average emerging-markets fund has a big stake in Chinese stocks and took a hit in the third quarter.

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Shares of Chinese companies sharply dropped in the third quarter amid regulatory crackdowns in technology and communication services sectors and doubts surrounding China’s largest property developer, Evergrande (EVGPY). The Morningstar China Index fell 18% and dragged down emerging-markets indexes, which fell 7.6%. The decline was widespread across Chinese companies. E-commerce giant Alibaba (BABA) fell 35%, and Tencent Holdings (TCEHY) recorded a 31% loss. 

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