Market Overview

Five China ETFs Your Broker Forgot To Mention


Did you know that there are nearly 160 ETFs offering exposure to China, the world's fastest growing major economy? That's about the same amount of ETFs with exposure to Brazil, India and Russia, the other three members of the BRIC quartet.

Despite the meaty number ETFs offering China exposure, the iShares FTSE China 25 Index Fund (NYSE: FXI) remains king of the castle with more than $6.3 billion in assets under management.

The good news is with almost 160 ETFs offering China exposure, investors don't need to rely on FXI for anything and there are certainly a fair amount of China-specific ETFs with good potential that are going ignored at the moment.

Emphasis on potential because this obviously isn't the best of times to be long China. That said, here are some nifty China-specific ETFs your broker forgot to tell you about.

Global X China Technology ETF (NYSE: CHIB): When one looks at CHIB's lineup of well-known Chinese Internet names, it's fair to draw the conclusion that it's odd this ETF hasn't gotten more press. After all, it's home to many of the Chinese Internet companies that are actually making money and the ones that will probably be around in 10 years. Sprinkle in some telecom exposure for a more conservative flair and you've got a decent ETF.

Market Vectors China ETF (NYSE: PEK): PEK was the first ETF listed in the U.S. to offer exposure to China's A shares, an asset class that foreigners usually can't get access to. To accomplish this objective, the Market Vectors China ETF doesn't actually hold stocks, it invests in swaps and other derivatives that are used to track China's A Shares market. PEK has outperformed FXI over the past three months.

First Trust China AlphaDEX Fund (NYSE: FCA): FCA made its debut and looked like another legitimate rival to FXI. To this point, the new ETF has struggled to grow assets under management, but that may more a symptom of a tricky market environment than anything else. In fact, FCA should flourish down the road because its sector diversity is excellent as five industry groups receive double-digit allocations. FXI can't even come close to that.

iShares MSCI China Index Fund (NYSE: MCHI): MCHI made its debut in March, and call us crazy, but initially it was hard to discern a difference between this ETF and FXI. We're still having a hard time with that, but MCHI has attracted almost $52 million in AUM and has done so in stealth fashion. Not the best, but not the worst of the China ETF lot.

IndexIQ Hong Kong Small Cap ETF (NYSE: HKK): For those looking for a more adventurous spin on Hong Kong, newly minted HKK could prove to be the answer. The IndexIQ Hong Kong Small Cap ETF has held up relatively well in recent weeks, but is still trading well below its all-time high. In other words, the IndexIQ Hong Kong Small Cap ETF is offering some decent value here.

Posted-In: Long Ideas News Sector ETFs Short Ideas Specialty ETFs New ETFs Emerging Market ETFs Global


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