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Blacklisted Chinese Stocks Not a Burning Issue for U.S.-Based Stock Funds, Yet

Few have big stakes in three telecom firms targeted for delisting, but more widely owned stocks are in U.S. government crosshairs.

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Geopolitical tensions with China are coming to a head in 2021, with uncertain implications for U.S. investors. A recent executive order targets 31 companies suspected of helping the Chinese military. After repeatedly changing its stance on the matter, the New York Stock Exchange announced it will delist the American depository receipts of three major telecom firms, China Mobile, China Telecom Corp., and China Unicom, on Jan. 11, 2021. Investors have until Nov. 11, 2021, to divest.

The companies facing immediate removal from the NYSE likely aren’t a major part of most U.S.-based investors’ portfolios but may present issues on the margin. Indeed, actively managed funds with Morningstar Analyst Ratings held roughly $1.3 billion in securities facing an ownership ban as of their most recently disclosed portfolios.

Katie Rushkewicz Reichart does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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