ETFs for Betting on China (Correct)
Orignial story corrected to reflect that the PowerShares Emerging Markets Infrastructure ETF is a a global equity fund focused on infrastructure development.
NEW YORK (TheStreet) -- Recently, China pledged to loan $20 billion to Venezuela as it seeks to strengthen its ties with oil-rich developing nations. The move underscores China's increasing wealth and global power.
China's GDP growth remains stunning, and it's expected to surpass Japan as the world's second largest economy sooner rather than later.
Following are four ways to invest in China and reap the benefits of its growth.1. Chinese Equity Market ETFs: These exchange-traded funds allow investors to gain direct exposure to Chinese companies. Broad-based ETFs to consider include PowerShares Golden Dragon Halter USX China (PGJ), Claymore/AlphaShares China All-Cap ETF (YAO) or the SPDR S&P China ETF (GXC). A Primer on China (Forbes) These ETFs are similar in that China Mobile, China Life Insurance Company and CNOOC are among their top holdings. For sector-specific exposure, one could consider the Claymore China Technology ETF (CQQQ), which gives exposure to 33 Chinese technology companies; the Global X China Energy ETF (CHIE), which gives exposure to 23 Chinese energy-related companies or the Global X China Industrial ETF (CHII), which gives exposure to 31 Chinese industrial companies. 2. Broad-Based Emerging-Market Funds: These give investors exposure to multiple emerging markets. Some offer exposure to both China and other nations that are benefiting from China's growth. One such ETF is the SPDR S&P Emerging Markets. (GMM), which allocates 17% of its assets to China and 9.2% to Taiwan, a nation whose economy is closely tied to China's. Another notable mention is the Vanguard Emerging Markets Stock ETF (VWO), which allocates 17.8% of its assets to China, 12.4% to South Korea and 11.2% to Taiwan. 3. Emerging Market Infrastructure ETFs: These allow investors to reap all of the benefits of a growing China, a nation focusing on infrastrusture development. A good play here is the PowerShares Emerging Markets Infrastructure ETF (PXR), which gives ample exposure to Shanghai Electric Group Company Limited and Jiangxi Copper Company Limited.
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