This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The China Fund Syndrome

World stock markets are hot and you can barely find a sector or region that isn't way up in the last year. This environment incites investors to take on more risk, not cut back. Owning a fund that was up 35% last year doesn't create happiness for investors -- it creates envy for markets and funds up 100% or more. China fits the bill.

As fear becomes optimism, the fund industry rolls out products to satiate the appetite of investors ready to take on the world, after licking their wounds in safe U.S. treasury bills. They want a story of boundless prosperity and potential profits. China delivers on all fronts.

Frenzy Over China

You can't watch TV or read a financial publication today without hearing about China. China and the huge trade surplus; China and Internet growth and stocks up 1,000%; China and the fastest growing GDP; China and the undervalued yuan; Chinese citizens with money to burn -- ready to stop riding bicycles and start maxing out credit cards.

A world of obese Chinese driving home in SUVs loaded up with consumer spoils from the mall, yapping on cell phones and eating fast food is surely right around the corner. Compared to a maxed-out, unemployed, stagnate wage-earning U.S. consumer, the smart money is betting on this new wave of prosperity.

Or at least that's what a national advertising campaign for the recently launched China-U.S Growth Fund by Fred Alger & Company implies.

The new fund breaks from the typical China-oriented fund by placing about half the portfolio in U.S. companies doing business in China and half in Chinese stocks. This means investors in the fund will own Yum! Brands (YUM), which apparently does a bang-up business hocking KFC to the Chinese, and Nike (NKE), currently building a brand in China alongside Netease (NTES) and other less speculative Chinese stocks. The fact that these U.S. multinational companies currently do less than 5% of their worldwide business in China isn't the issue -- they're there early and will profit from the region's growth.

1 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs