This Day On The Street
Continue to site
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

Hong Kong ETF Doesn't Target China Themes

As China's middle class grows and the country modernizes its infrastructure, it makes sense to allocate to areas where money must be spent. Property development in Hong Kong doesn't play into this theme. However, money must be spent on China's water problem. Duoyuan Global Water (DGW), which cleans water, recently debuted on the NYSE.

China must also improve its roads and its railway system to encourage integration between the nation's rich cities and poorer parts of the country. Companies like Cheung Kong Infrastructure Holdings and China Railway Construction will be a part of the solution.

While China imports plenty of the resources it will need, a lot of it comes companies like Jiangxi Copper or coal producer China Shenhua Energy.

And what about solar companies, such as Yingli Green Energy Holding (YGE) or Solarfun Power Holdings (SOLF)? They seem like a logical bet if coal-dependent China decides to address its air-quality problems. But it's not clear to me that China views solar energy as a worthwhile investment.

Hong Kong stocks and ETFs could be a good long-term holding, but I believe you'll get a different outcome than if you were investing in mainland China, specifically. There are also industry-specific funds, such as the iShares Emerging Market Infrastructure Index Fund (EMIF) and the PowerShares Global Coal Portfolio (PKOL), which target some of these themes.

The Shanghai Composite is up 80% this year. While it still has a long way to go before getting to its bull market high, there is no reason it won't decline 20% to 30%. A drop wouldn't mean the theme is over but there will be big moves in both directions. Still, it makes more sense to add emerging market volatility this way than with property stocks.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NYX $0.00 0.00%
EMIF $30.00 0.00%
EWH $19.80 0.00%
YGE $3.60 0.00%
AAPL $93.64 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs