China (FXI) vs Emerging Markets (EEM)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
China is the largest EM weight, so FXI versus EEM reveals whether China is driving EM performance or dragging it down. When FXI outperforms EEM, China-specific catalysts (stimulus, property easing, re-opening) are lifting the complex. When EEM outperforms FXI, other EMs (India, Latin America, Korea) are leading and China is a headwind.
Cross-Asset Analysis
To orient the reader: China Large-Cap (FXI) represents iShares China Large-Cap ETF, proxy for Chinese equity market and Emerging Markets (EEM) represents iShares MSCI Emerging Markets ETF, which is why this comparison sits in the peer pair category on Convex. China Large-Cap (FXI) and Emerging Markets (EEM) look similar at a glance, but the embedded factor tilts between them matter a great deal over time. Index construction choices inside China Large-Cap (FXI) and Emerging Markets (EEM), including weighting methodology and inclusion rules, create persistent tilts that show up in the spread.
Pairs trading between China Large-Cap (FXI) and Emerging Markets (EEM) is common because the spread is more stationary than either individual price, suitable for mean-reversion strategies. Liquidity differences between China Large-Cap (FXI) and Emerging Markets (EEM) produce asymmetric spread moves during risk-off episodes. Inside the Equity Index universe, China Large-Cap (FXI) and Emerging Markets (EEM) represent different flavors of the same underlying exposure.
Factor exposures embedded inside China Large-Cap (FXI) and Emerging Markets (EEM) drive their relative performance, with growth-value, large-small, and domestic-international all surfacing in the spread. Interest rate cycles drive China Large-Cap (FXI) versus Emerging Markets (EEM) relative performance through discount-rate sensitivity, with longer-duration exposures suffering more when rates rise.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between China Large-Cap (FXI) and Emerging Markets (EEM)?+
China Large-Cap (FXI) and Emerging Markets (EEM) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between China Large-Cap (FXI) and Emerging Markets (EEM) captures the specific macro signal that flows through this relationship.
When does China Large-Cap (FXI) typically lead Emerging Markets (EEM)?+
China Large-Cap (FXI) tends to lead Emerging Markets (EEM) during rotation episodes between the two factor exposures. In those periods, moves in China Large-Cap (FXI) precede corresponding moves in Emerging Markets (EEM) by days to weeks, depending on the transmission channel and the depth of each market.
How are China Large-Cap (FXI) and Emerging Markets (EEM) historically correlated?+
Long-run correlation between China Large-Cap (FXI) and Emerging Markets (EEM) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the China Large-Cap (FXI)-Emerging Markets (EEM) relationship.
What macro conditions drive divergence between China Large-Cap (FXI) and Emerging Markets (EEM)?+
Divergence between China Large-Cap (FXI) and Emerging Markets (EEM) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in China Large-Cap (FXI) or Emerging Markets (EEM).
Is China Large-Cap (FXI) a hedge for Emerging Markets (EEM)?+
Peers like China Large-Cap (FXI) and Emerging Markets (EEM) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the China Large-Cap (FXI)-Emerging Markets (EEM) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.