NEW YORK ( TheStreet) -- China funds have been rallying. During the past three months, the average China fund returned 12.1%, according to Morningstar.Investors have taken notice of the strengthening environment, putting $2 billion into iShares FTSE China 25 Index ETF ( FXI) this year. Positive economic news has been spurring the market gains, says Morningstar analyst Patricia Oey. Retail sales in China have been climbing, growing at an annual rate of 14.5% in October. After slowing for months, industrial production growth has stabilized at a healthy annual rate of 9%. Economists say the improving picture may be connected to a temporary increase in infrastructure spending this year. The government mandated the stimulus to strengthen the economy at a time when a new leadership team is about to take office. CHXF). The WisdomTree fund is broadly diversified with 13% of assets in consumer staples, 24% in energy, and 15% in telecommunications. By putting half of your stake in each of the two funds, you would have 29% of the assets in financials, a reasonable allocation.