The start of 2024 hasn’t been very smooth for China, the world’s second-largest economy. From a macroeconomic perspective, the nation has been plagued with flagging exports, sluggish consumer spending, towering local government debt and a property crisis.

Most notably, The China Evergrande Group, a company that exemplified the country’s real estate boom and bust, was issued a liquidation order by a Hong Kong court. From a capital markets standpoint, there continues to be a sell-off in Chinese equities, with a drawdown that is currently hovering around 50% (see chart following).

The Chinese Securities Regulatory Commission has banned major institutional investors from reducing equity holdings at the open and close of each trading day, as part of the government’s most forceful attempt yet to prop up the nation’s stock market. Meanwhile, indices provider MSCI has dropped dozens of Chinese names from multiple indexes – an action that will weigh on China’s equity markets.

While discussions often focus on China due to its significant influence in the emerging markets asset class, it's important to note that the countries within this group represent diverse global economies. These nations have access to varied natural resources and host companies offering unique products and services utilized worldwide. When exploring investment opportunities beyond China in emerging markets, investors can find meaningful avenues to pursue.

iShares India Index ETF (Ticker: XID)

With the Chinese economy undergoing a significant economic slowdown, the opportunity that India possesses has now become apparent to many stakeholders. The investment and policy decisions being made to advance the Indian economy in recent years are beginning to bear fruit, as broad-based infrastructure development focusing on improving capacity, decarbonization and self-sustaining business models is becoming the norm.

Due to India’s strong economic growth, firms such as Rail Vikas Nigam Ltd, an Indian central public sector enterprise that works as the construction arm of the Ministry of Railways, have exhibited phenomenal growth in recent years.

Furthermore, India is actively seeking to participate in semiconductor development, as NVIDIA and Reliance Industries announced a collaboration to develop India’s own foundation large language model trained on the nation’s diverse languages and tailored for generative AI applications to serve the world’s most populous nation.

For investors that desire exposure to India’s fast-developing economy, the iShares India Index ETF (Ticker: XID) provides equity exposure to the 50 largest firms by market cap within the country, allowing for broad-based exposure to the nation’s leading firms in a single solution.

AGF Emerging Markets ex China ETF(Ticker: AEMX)

For investors looking for an actively managed emerging market solution, the AGF Emerging Markets ex China Fund (Ticker: AEMX) invests in growth-oriented companies located in, or with significant business interests in, emerging market countries excluding China.

The manager will use a bottom-up investment approach aimed at identifying companies with significant business interests in emerging market countries outside of China trading at a significant discount to their expected earnings potential. By employing this approach, the manager intentionally crafts a solution capable of fostering long-term earnings growth. This is achieved by investing in companies with strong competitive positioning within their respective markets and excellent management teams.

In essence, although the solution primarily targets businesses outside of China, the manager's disciplined investment approach ensures that high-quality companies are included in its portfolio. This makes it a compelling option for investors seeking to diversify their core equity holdings and capitalize on the distinct opportunities offered by emerging markets.iShares MSCI Emerging Markets ex China Index ETF (Ticker: XEMC)

As mentioned previously, the emerging equities landscape is broad. For investors that desire a passively managed solution that provides exposure to all emerging market economies, except China, the iShares MSCI Emerging Markets ex China Index ETF (Ticker: XEMC) is a worthy consideration. The ETF will track the performance of the MSCI Emerging Markets ex China Index, thus ensuring investors are provided with comprehensive market exposure.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.