iShares MSCI Hong Kong ETF (EWH) Holds Strong Despite Geopolitical Headwinds

The iShares MSCI Hong Kong ETF (EWH) is rated hold due to the recent price surge and geopolitical concerns. The ETF's financial sector strength is offset by real estate headwinds. Investors are advised to wait for a price drop before considering a purchase.

Hong Kong's insurance sector is experiencing a significant rebound, with insurers AIA, Prudential, and FWD reporting substantial growth in new business in the first half of 2025. This resurgence is attributed to pent-up demand post-COVID-19 and the increasing interest of mainland Chinese investors and emigrants seeking returns and work opportunities in the city [1].

FWD, one of the leading insurers in Hong Kong, saw its value of new business increase by 91% year-on-year to $267 million [1]. Prudential reported a 16% year-on-year rise in new business profit to $540 million over the same period [1]. AIA, another major player, reported a 24% growth in the value of its new business in Hong Kong, reaching $1.1 billion [1].

These figures indicate a strong recovery in the Hong Kong insurance market, driven by durable demand. The mainland Chinese market's interest in Hong Kong's financial hub, coupled with the city's status as a gateway to the Asia-Pacific region, is fueling this growth.

However, despite this positive trend, investors should remain cautious. The iShares MSCI Hong Kong ETF (EWH), which tracks the Hong Kong stock market, is currently rated "hold" due to recent price surges and geopolitical concerns [2]. The ETF's financial sector strength is offset by headwinds from the real estate sector. Investors are advised to wait for a price drop before considering a purchase.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L6N3UP044:0-hong-kong-insurers-comeback-party-is-heating-up/
[2] iShares MSCI Hong Kong ETF (EWH)