ETFs for Rising Consumption and Manufacturing Activity in China
Indeed, the evidence is pointing to a winning hand for investors in Chinese equities. Not only is GDP finally trending upward, but leaders have more boldly expressed a willingness to employ monetary/fiscal stimulus to support a 7.5% growth rate. (They're likely to see north of 8% without stimulative measures.)
With a variety of benchmark indexes offering forward P/Es of nine to 10, stocks tied to China look better than they have in years.
While there are those who may view exchange-traded favorites like GXC and iShares FTSE China 25 (FXI) as lower risk assets due to their diversification, I tend to favor trading partners in the Asia-Pacific region.
If you're intrigued by the manufacturing angle, iShares MSCI Australia (EWA) beckons as one of China's most important providers of materials. (Also, you shouldn't shake a stick at that 4.1% SEC distribution yield.)South Korea, as represented by the iShares MSCI South Korea Index (EWY), is another key trading partner with China. Whereas the U.S. and Europe import a staggering amount of goods/services from the mainland, Korea, the fifth largest trading partner, is a net exporter. For believers in the idea that China is in the process of transitioning to a powerful consumer class, EWY is a solid ETF in the Asian neighborhood. Follow @ETFexpert This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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