This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

China ETF Targets Booming Industry

NEW YORK ( TheStreet) -- There has been an onslaught of China-focused exchange traded funds, mostly from GlobalX and one from Claymore. GlobalX China Industrials ETF (CHII) makes the best first impression.

GlobalX Industrials looks like an infrastructure fund, with construction and engineering comprising 27% of the ETF and transportation 22%. Industrial equipment accounts for 26%, and building materials, mostly cement companies, takes 20%.

The China ETF's holdings let you follow the building process, from raw materials (cement) to producers (construction firms) to end users (China Railway Group, Beijing Capital International Airport). The methodology limits any single stock's weighting to 4.75% of the ETF.

See Cramer's Mobile Internet Tsunami stocks>>>

Other than the industrials ETF, GlobalX has also launched funds for the financial, consumer and technology sectors. The reason that the industrial fund makes the best first impression has to do with the fundaments of China, combined with the unique exposure that the ETF offers. Banks in China have increased their lending in a shocking fashion over the past couple of years, paving the way for too much leverage and risking a financial meltdown akin to that of the U.S. And the technology fund is heaviest in the same Internet stocks -- Baidu.com (BIDU - Get Report), Sina (SINA - Get Report) and Netease (NTES - Get Report) -- that have been available to U.S. investors for years.

The consumer fund is interesting as a late-cycle play. The logic in looking to the GlobalX China Consumer Sector ETF (CHIQ) for later down the road has several facets to it. First is that, for now, China is still building up its infrastructure and modernizing the country, in terms of municipal services and amenities in people's homes. At some point, the infrastructure theme will play out, at which time it may make sense to consider consumer stocks as people in the rural west finally ascend to a lifestyle closer to that of the more urbanized eastern part of the country.

1 of 2

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
SYM TRADE IT LAST %CHG
BIDU $203.75 0.00%
CHII $13.94 0.00%
CHIQ $12.97 0.00%
FXI $43.76 0.00%
NTES $100.04 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

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