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China ETF
Old 03-31-2014, 07:37 PM   #1
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China ETF

I was reading an article that mentioned the universal pessimism regarding China's stock market, so I thought,hey, this could be a good place to invest.

I found an ETF, CHXF, with 0.65 ER. When I looked at performance, it is down less than 10% in the last year. I know the last year has been good for other markets, but 10% down doesn't sound like the apocalypse I anticipated.

Anyone doing any research on investing in China?

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Old 03-31-2014, 10:45 PM   #2
gone traveling
Join Date: Oct 2007
Posts: 1,135
My asset allocation is less than 10% exposure to this market via ETFs that can be purchased in the west. I am long.

Bear in mind
1. Much of the china stock market, of course, is off limits to non-national chinese (the A shares). While b and h shares are available to more foreigners.

2. The IPO market is once again alive and well.

3. A new round of stimulus package is expected any time now but i think is way overly hyped.

4. The glory days of double digit gdp growth are probably gone, but real, long term 7% sustainable growth for the next decade is quite reasonable. PE's are low by historic levels.

5. Financial reform is slow coming. but the key here is slow. currency is still not freely floating nor freely exchangeable

6. QE tapering will impact all emerging markets including PRC.

7. Real Property is over valued and likely a huge bubble but who knows when it may pop. property is sold as leasehold (70 years in most cases). The cost of housing exceeds the highest of housing markets of the USA (san francisco) by a factor of 2x in portions of major T1 cities like Shanghia and's not exactly logical, but a closed market with 1 billion buyers inflates the price.

8. Bad loans are on bank balance sheets but nothing like the size of the pre-cursor to the USA financial crisis/credit crunch.

YINN (leveraged) and FXI are a couple of the larger/liquid/popular china ETF's...there are many others too....

I live in north china (since 2007)

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Old 05-14-2014, 10:29 PM   #3
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Barrons has an article about CHL, which is China Mobil. They mention that this stock will take off when Alibaba IPO's. CHL is 90% gov. owned, which is a little dangerous, but this is the company most most people will use to access the internet. Someone called Cramer yesterday cc CHL and he said the same thing.

As far as funds go, FXI seems to be the go to fund for China.
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Old 05-14-2014, 11:08 PM   #4
gone traveling
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FXI is unleveraged fund. YINN is leveraged. Both holding the top 25 stocks of h share companies based on market cap. Heavy in financials.

I would stay away from china mobile or any single stock. Better to buy into a fund to reduce risk by diversification since most western investors are completely clueless about Chinese companies.

Cramer is an idiot buffoon.

His thesis on china mobile is flawed....everyone is already on the internet. CMCC are slow to roll out LtE and chose a proprietary standard for 3G. Companies like tencent are hammering cmcc's arpu.

More Examples - Broadband penetration in china is better than the usa and most western nations. I could go on for days ...

I think lots of people are gonna get burned by alibaba.

Been in china since 2007 ! Seeing it all unfold real time by my own eyes. Amazing place. Lots of opportunity and risk.

Overall one of the cheaper equity markets in the world right now. A good speculation /value play.

A question: is warren buying ??
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