Well-known investor Jim Rogers was also featured in the latest Barron's. When asked about China, he was most excited about the ability of Chinese to travel more frequently both inside and outside of their country. He has purchased shares of seven different Chinese airlines.
The financial companies don't capture Chinese consumer trends and purchasing patterns. To the extent that there are problems with bad construction loans and mismanagement of debt issuance, the financials would seem to carry more risk, and this has been playing out in the performance of China-themed ETFs.
ETF provider WisdomTree said in a recent report that concerns about the Chinese banks are overblown. Wisdom Tree said that the ratio of nonperforming loans (NPL) is low, that the banks have set aside provisions equal to three times the value of NPLs and that the banks' stocks are cheap, with many having price-to-earnings ratios in the mid single digits.
At some point the financials should become attractive. Any investor believing that time is now would get plenty of exposure from any of the broad-based China funds, including CHNA.At the time of publication, Nusbaum had no positions in securities mentioned. Follow @randomroger This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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