Q&A Series: Looking beyond China’s economic slowdown to its innovation boom

China’s economy continues to face near-term challenges, with subdued consumer demand, a prolonged property downturn and intense competition weighing on growth. However, beneath these pressures, the country’s next-generation industries continue to expand rapidly.

China has emerged as a global leader in areas including artificial intelligence, electric vehicles, clean energy, robotics and biotechnology. Strong domestic competition, a deep pool of skilled talent and supportive government policies are helping drive innovation and accelerate the development of these high-growth industries. As the broader economy shows early signs of stabilisation, these structural growth themes could offer attractive opportunities for investors seeking long-term exposure to China’s transformation into an innovation-driven economy.

In this article, we share insights from UOB Asset Management on the outlook for China’s economy and equity market, as well as the key features of the UOBAM Ping An ChiNext ETF.

Introducing the UOBAM Ping An ChiNext ETF

The UOBAM Ping An ChiNext ETF provides investors with exposure to some of China’s most innovative and fastest-growing companies. The ETF invests in the Ping An ChiNext ETF, which tracks the ChiNext Index, comprising 100 of the largest and most liquid A-share companies listed on the ChiNext board of the Shenzhen Stock Exchange. Its holdings span key pillars of China’s next-generation economy, including artificial intelligence, semiconductors, advanced manufacturing, electric vehicles, clean energy and healthcare.

Table 1: Key information about the ETF

ETF Details
Underlying Index	ChiNext Index
Base Currency	SGD
Trading Currency	Primary currency: SGD Secondary currency: USD
SGX Code	CXS (SGD), CXU (USD)
Listing Date	14 November 2022
Number of holdings	100
Asset Under Management	SGD 4.03 mil
Trading Board Lot Size	1 unit
Management Fee	Currently 0.50% p.a.; Maximum 2% p.a.
Distribution Policy	Fund Manager may but currently do not make distributions for the Fund.
Source: UOB Asset Management. Data as of 30 June 2026.

1. What is your assessment of the current state of the Chinese economy, and what is your outlook for the China equity market going forward?

We are positive on China at the moment. While overall economic growth remains sluggish, as reflected in weak private consumption, there are certainly bright spots. China is clearly leading in many future-oriented, high-growth industries, including artificial intelligence (AI), clean energy, electric vehicles (EV), biotech, and robotics. We expect this lead to widen further over the next few years, driven by intense domestic competition, a vast pool of highly educated and disciplined talent, and supportive government policies.

Even in the weaker parts of the economy, we are seeing possible green shoots emerge. Recent property sales data shows signs of stabilisation in the sector, while consumer-related industries, which have been plagued by weak demand and irrational competition, are showing early signs of bottoming out.

From an investment perspective, China remains largely unloved by investors and has been one of the worst-performing markets globally this year. As a result, many companies are trading at valuations that are near multi-year lows, making them increasingly attractive from a long-term investment standpoint.

2. Where do you see the most compelling investment opportunities within Chinese equities today?

We believe AI-related technology companies will continue to be an attractive long-term investment proposition, notwithstanding the high volatility of their share prices. China is still in the early stages of its AI infrastructure buildout and is likely to see phenomenal growth in the years ahead.

Beyond growth stocks, we also see tremendous value in banks and consumer companies, two sectors that have fallen out of favour with investors in recent years. Many of these companies are trading at the lower end of their historical valuation ranges despite generating strong cash flows and returning a significant portion of earnings to shareholders through dividends.

3. Could you introduce the ChiNext Index and explain the type of exposure it offers investors?

The ChiNext Index tracks the 100 largest and most liquid A-share stocks listed on the ChiNext board of the Shenzhen Stock Exchange. Often referred to as China's Nasdaq, the growth-focused index provides exposure to dynamic and innovative companies across sectors such as AI, semiconductors, advanced manufacturing, electric vehicles, clean energy, and healthcare.

4. Could you share some insights into a few of the ChiNext Index's largest holdings and what makes them attractive?

The ChiNext Index, Shenzhen's growth-focused board, is dominated by a number of technology and new-energy leaders[1].

Contemporary Amperex Technology (CATL), the world's largest EV battery manufacturer[2], is the index's largest constituent. Its scale, technological leadership in battery chemistry, and expanding global manufacturing footprint make it a compelling proxy for the long-term growth of electric vehicles and energy storage.

Among the key beneficiaries of the AI theme are Zhongji Innolight and Eoptolink Technology, both leading optical module manufacturers. They supply high-speed optical transceivers used in AI data centres and cloud infrastructure, making them attractive "picks-and-shovels" plays on the continued growth in global AI-related capital expenditure.

East Money Information, one of China's leading online brokerage and financial information platforms, provides exposure to rising retail investor participation and broader capital market activity. The company stands to benefit from any sustained recovery in China's equity markets.

Another notable holding is Sungrow Power Supply, a leading provider of solar inverters and energy storage systems. The company is well positioned to benefit from the global expansion of renewable energy and the growing demand for battery storage solutions.

Collectively, these companies provide exposure to several of China's most important structural growth themes, including AI infrastructure, electric vehicle and battery supply chains, renewable energy, and the continued development of China's capital markets. As a result, the ChiNext Index offers investors a differentiated way to access China's innovation-driven economy.

5. What are the key features of the UOBAM Ping An ChiNext ETF, and why should investors invest in it?

The ChiNext Index offers a unique opportunity to participate in China's innovation-driven growth. The UOBAM Ping An ChiNext ETF provides a convenient and efficient way to gain exposure to the businesses at the forefront of this transformation.

The ETF invests in companies driving China's emergence as a global innovation powerhouse, with exposure to key pillars of the country's next-generation economy, including AI, clean energy, advanced manufacturing, and biotechnology. More than 80% of the portfolio is allocated to innovation-related sectors that are closely aligned with China's long-term strategic priorities[3].

With significant exposure to China's domestic technology leaders, the ETF is also well positioned to benefit from the country's growing AI momentum. Since the DeepSeek breakthrough in January 2025, the ETF has outperformed major China and Hong Kong equity benchmarks, including the CSI 300, MSCI China, Hang Seng Tech Index, and Hang Seng China Enterprises Index.

UOBAM Ping An ChiNext ETF Total return (SGD) since Jan 2025

Source: Bloomberg, as of 23 June 2026. DeepSeek window started from 24 Jan 2025. Comparison indices are not directly investable. Past performance is not indicative of future results. CSI 300: CSI 300 Index; MSCI China: MSCI China Index; HSCEI: Hang Seng China Enterprises Index; HS Tech: Hang Seng TECH Index

For investors seeking targeted exposure to China's structural growth opportunities, the ETF provides access to many of the country's most innovative and dynamic businesses through a single investment vehicle.

[3] Source: UOBAM, as of 30 June 2026

6. How does the UOBAM Ping An ChiNext ETF compare to other ETFs tracking the ChiNext Index?

While all ChiNext ETFs seek to track the same index, investors should also consider the strength and experience of the underlying manager. The UOBAM Ping An ChiNext ETF invests into the Ping An ChiNext ETF, which is managed by Ping An Fund Management, one of China's leading fund houses with approximately RMB 900 billion in assets under management and more than 10 years of asset management experience[4].

We believe the scale, resources, and market expertise of the underlying manager provide investors with an added level of confidence when accessing China's innovation-driven growth opportunities.

Important notice and disclaimers

MSCI Data are exclusive property of MSCI. MSCI Data are provided “as is”, MSCI bears no liability for or in connection with MSCI Data. MSCI full disclaimer at msci.com/notice-and-disclaimer-for-reporting-licenses.

This document is for general information only. It does not constitute an offer or solicitation to deal in units (“Units”) in the UOBAM Ping An ChiNext ETF (the ”Fund”) or investment advice or recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it.

The information contained in this document, including any data, projections and underlying assumptions, are based upon certain assumptions, management forecasts and analysis of information available and reflects prevailing conditions and the views of UOB Asset Management Ltd (“UOBAM”) as of the date of this document, all of which are subject to change at any time without notice. In preparing this document, UOBAM has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by UOBAM. While the information provided herein is believed to be reliable, UOBAM makes no representation or warranty whether express or implied, and accepts no responsibility or liability for its completeness or accuracy. Nothing in this document shall, under any circumstances constitute a continuing representation or give rise to any implication that there has not been or there will not be any change affecting the Fund. No representation or promise as to the performance of the Fund or the return on your investment is made. Past performance of the Fund or UOBAM and any past performance or prediction, projection or forecast of the economic trends or securities market are not necessarily indicative of the future or likely performance of the Fund or UOBAM. The value of Units and the income from them, if any, may fall as well as rise, and is likely to have high volatility due to the investment policies and/or portfolio management techniques employed by the Fund. Investments in Units involve risks, including the possible loss of the principal amount invested, and are not obligations of, deposits in, or guaranteed or insured by United Overseas Bank Limited (“UOB”), UOBAM, or any of their subsidiary, associate or affiliate (“UOB Group”) or distributors of the Fund. The Fund may use or invest in financial derivative instruments and you should be aware of the risks associated with investments in financial derivative instruments which are described in the Fund's prospectus. The UOB Group may have interests in the Units and may also perform or seek to perform brokering and other investment or securities-related services for the Fund.

Investors should note that the Fund is not like a conventional unit trust in that an investor cannot redeem his Units directly with UOBAM and can only do so through the participating dealers, either directly or through a stockbroker, if his redemption amount satisfies a prescribed minimum that will be comparatively larger than that required for redemptions of units in a conventional unit trust. The list of participating dealers can be found at www.uobam.com.sg. An investor may therefore only be able to realise the value of his Units by selling the Units on the Singapore Exchange Limited (“SGX”). Investors should also note that any listing and quotation of Units on the SGX does not guarantee a liquid market for the Units.

An investment in unit trusts is subject to investment risks and foreign exchange risks, including the possible loss of the principal amount invested. Investors should read the Fund’s prospectus, which is available and may be obtained from UOBAM or any of its appointed agents or distributors, before deciding whether to subscribe for or purchase any Units. You may wish to seek advice from a financial adviser before making a commitment to invest in any Units, and in the event that you choose not to do so, you should consider carefully whether the Fund is suitable for you.

The Shenzhen Stock Exchange has appointed Shenzhen Securities Information Company Limited (“SSI”) to manage the ChiNext Index. The Shenzhen Stock Exchange and the SSI are independent of the Manager. The UOBAM Ping An ChiNext ETF is not in any way endorsed, sold, sponsored or promoted by the Shenzhen Stock Exchange, SSI or the SGX. The Shenzhen Stock Exchange, SSI or the SGX makes no warranty or representation whatsoever, expressly or impliedly, as to the results of the use of the ChiNext Index. The ChiNext Index is calculated by or on behalf of SSI, which will adopt all necessary measures to ensure the accuracy of the ChiNext Index. However, the Shenzhen Stock Exchange, the SSI and the SGX shall not be liable (whether in negligence or otherwise) to any person for any error in the ChiNext Index and shall not be under any obligation to advise any person or any error therein. The ChiNext Index is owned by the Shenzhen Stock Exchange.

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