China Real Estate Mutual Fund/ETF Faceoff

While Western real estate has been something of a rollercoaster ride for investors this year, some fund managers have looked beyond the borders of the U.S. in their search to add some diversity in the form of real estate to their portfolios. Interestingly, some have set aside a large chunk of their portfolios for this one sector.

Traditionally two funds are best compared within a sector, such as materials or energy. However, actively managed mutual funds have the capability to resemble anything the fund manager sees fit within the fund's stated objectives. In the case of Third Avenue Value(TAVFX Quote), the holdings have come to resemble those of the iShares MSCI Hong Kong Index Fund(EWH Quote).

Third Avenue Value is a mutual fund managed by Martin J. Whitman. The fund invests in common stocks of well-financed companies at a discount to what the advisers believe is their true value. Currently, a large portion of the fund's assets are placed in Hong Kong real estate companies. In particular, one of these holdings is the Hong Kong real estate company Cheung Kong Holdings, which makes up 12% of the fund's total assets.

Chueng Kong Holdings gives both funds great opportunity for investors looking to grab a chunk of the Hong Kong real estate market. The company is the flagship and one of the nation's top conglomerates. It is headed by Li Ka-shing, who is currently labeled as the sixteenth wealthiest man in the world. The Wall Street Journal has even gone so far as to label him "Warren Buffett of Asia." ...