It’s time to sell KGRN
27th June 2024 |
We’ve decided to sell Kraneshares MSCI China Clean Technology Index UCITS ETF from the model portfolio at a disappointing 19.65% loss.
As you will recall, KGRN tracks the MSCI China IMI Environment 10/40 Index and is primarily distributed across ten holdings represented by electric vehicle, clean energy and solar companies in China.
The ETF has more or less been in the red since we recommended it in mid-October last year and it’s increasingly hard to pinpoint when the fortunes of the only UK-listed ETF to specifically tap into China’s cleantech industries will turn around.
US President Joe Biden is ramping up tariffs on Chinese-made electric cars, solar panels, steel and other goods. The measures include a 100% border tax on electric cars from China.
Meanwhile, the European Commission is also set to impose new tariffs going up to 38.1% for battery-operated vehicles imported from China from November.
The tariffs will undoubtedly reduce a portion of demand from the US and Europe at a time when the Chinese solar industry in particular is battling a market oversupply and a plunge in prices of solar cells and modules.
Rapid capacity additions drove down prices of China’s finished solar panels by 42% last year.
Although the Chinese government is still set to funnel over $7 trillion into energy transformation through 2040, global markets continue to focus on more immediate concerns – a situation that I expect to persist for a while yet.
As such, let’s SELL.
Action to take: SELL Kraneshares MSCI China Clean Technology Index UCITS ETF
Ticker: LON: KGRN
Current price: $19.95
Our buy price: $24.83
% gain/loss: -19.65%
James Allen
Co-editor, Southbank Growth Advantage
