China ETFs: Now You Have a “Class A” Choice
The world of ETFs just keeps getting bigger and better, with fantastic new choices spanning the entire globe. The latest sector demonstrating what I think is an extremely investable innovation is with ETFs pegged to the Chinese stock market.
As subscribers to my Successful ETF Investing advisory newsletter know, I have been bullish on China and the growth story for some time. Recent metrics from that country, such as the outstanding manufacturing sector readings showing the best growth in that critical segment in 18 months, argue nearly conclusively that the Chinese economy now has virtually no chance of the so-called “hard landing” that China skeptics have been predicting.
The positive China data, as well as economic growth around the globe, hasn’t been lost on the smart money. Take a look at the table here of Chinese ETFs. As you can see, the gains over the past one month, three months and year to date have been outstanding.
| Ticker | Name | 1MO% | 3MO% | YTD% | Yield% |
|---|---|---|---|---|---|
| CHIX | Global X China Financials | 11.80 | 20.28 | 4.45 | 0.47 |
| KWEB | Kraneshares CSI China Internet | 4.09 | 20.23 | 15.76 | 1.02 |
| YAO | Claymore/AlphaShares China All-Cap | 7.73 | 16.95 | 4.26 | 1.71 |
| FXI | iShares FTSE/Xinhua China 25 Index Fund | 10.25 | 16.91 | 6.42 | 1.75 |
| CQQQ | Claymore/AlphaShares China Technology | 3.44 | 16.51 | 7.07 | 0.74 |
| QQQC | Global X China Technology ETF | 4.14 | 16.99 | 9.64 | 0.03 |
| CHIM | Global X China Materials ETF | 11.50 | 15.77 | 7.30 | 1.54 |
| CHXX | Emerging Global Shares Index | 12.26 | 16.19 | 2.82 | 1.41 |
| PGJ | WisdomTree India PowerShares Golden Dragon Halter China | 3.07 | 15.51 | 5.11 | 1.11 |
| FCHI | iSHares FTSE China (HK Listed) Index | 8.63 | 15.34 | 3.76 | 1.25 |
These ETFs represent strong candidates for a China-focused portfolio, and my subscribers currently have several of these funds on their recommended buy lists. Yet these funds aren’t the only China ETFs out there I have my eye on.
The latest development is the advent of China A-shares funds, or shares traded primarily on the Shanghai Composite ($SSEC). Prior to ETFs that feature Chinese A-shares, it was very difficult for U.S. investors to buy stocks that trade on Chinese stock exchanges.
Yet thanks to funds such as the db X-trackers Harvest CSI 300 China A-Shares Fund (ASHR) and the Market Vectors ChinaAMC A-Share (PEK), investors now can get direct exposure to stocks that trade in China.
There are a couple of other China A-share funds that currently trade, but not for long. Now there are 15 additional China A-share funds in the pipeline, awaiting regulatory approval. That means you’ll soon have about 20 China A-share funds to choose from, and that’s great for anyone who is a fan of Chinese stocks.
The advent of these funds also shows just how innovative the ETF world has become, so why would you buy anything else?
Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.
His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.
