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TheStreet Open House

Top 10 China ETFs

NEW YORK ( ETF Digest) -- Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

China, the world's fastest growing economy, continues to intrigue and draw investors to it. The high rate of economic growth has positive implications for investment opportunities. At the same time, high rates of growth create inflationary pressures, which can quickly cause turmoil and losses for linked equity markets. There remains a level of regulatory and corporate governance mistrust among some investors questioning the accuracy of accounting standards and enforcement.

There are enough ETF choices from which to choose and we provide you with some of the most popular choices. We've cobbled some good choices together and where repetitive choices exist we've paired some together having similarities too hard to ignore.

We're not ranking these ETFs favoring one over another so don't let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it's not our intention to recommend one over another.

Our technical analysis methodology involves using, where possible, monthly charts with enough data to allow investors to stay on the right side of the 12 month moving averages. Further, when market prices move too far above or below this moving average investors can assume a correction in the other direction will eventually take place. In this regard caution is advised.

ProShares and Direxion Shares both offer inverse and leveraged long ETFs for those investors wishing to hedge or speculate.

FNI (First Trust Chindia ETF) follows the ISE Chindia ETF which consists of 50 ADRs and or stocks of companies domiciled in China or India. The fund was launched in May 2007. The expense ratio is .60%. AUM (Assets under Management) equal $130 million and average daily trading volume is 48K shares. As of mid-August 2011 the annual dividend was $.05 making the current yield .22% and YTD return -9.50%.

Data as of August 2011

FNI Top Ten Holdings & Weightings

  1. Baidu, Inc. ADR (BIDU): 7.63%
  2. HDFC Bank Ltd ADR (HDB): 7.14%
  3. ICICI Bank Ltd ADR (IBN): 7.08%
  4. China Mobile Ltd. ADR (CHL): 6.96%
  5. Infosys Ltd ADR (INFY): 6.85%
  6. CNOOC, Ltd. ADR (CEO): 6.61%
  7. SINA Corporation (SINA): 4.41%
  8. Ctrip.com International, Ltd. ADR (CTRP): 4.03%
  9. PetroChina Company, Ltd. ADR (PTR): 4.02%
  10. Sterlite Industries (India), Ltd. ADR (SLT): 3.86%

FXI (iShares China 25 Index ETF) follows the FTSE China 25 Index which measures the performance of the largest companies in the China equity market. The fund was launched in October 2004. The expense ratio is .72%. AUM equal nearly $6 million and average daily trading volume is 18M shares. As of mid-August 2011 the annual dividend was $.17 making the current yield .47% and YTD return of -14.80%.

Direxion Shares and ProShares each have inverse and leveraged products available for those wishing to hedge or speculate.

Data as of August 2011

FXI Top Ten Holdings & Weightings

  1. China Mobile Ltd. (00941): 9.68%
  2. China Construction Bank Corp (00939): 9.22%
  3. Industrial And Commercial Bank Of China Ltd. (01398): 7.96%
  4. CNOOC, Ltd. (00883): 6.51%
  5. Bank Of China Ltd. (03988): 5.46%
  6. China Telecom Corp Ltd (00728): 4.32%
  7. Ping An Insurance Group (02318): 4.27%
  8. China Shenhua Energy Company Limited (01088): 4.23%
  9. China Petroleum & Chemical Corporation (00386): 4.07%
  10. Agricultural Bank of China Ltd. (01288): 4.01%

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