Investing in China

[Craig]

http://early-retirement.org/forums/index.php?topic=1467.0

China continues to be the rage. I was chatting this week with the General Counsel for a well known retail chain, and he pointed out the huge proportion of Chinese product in their stores. We both wondered (somewhat tongue in cheek) if Americans manufacture anything anymore.

Besides FXI, any other efficient ways to invest in the growth of China today in a targeted manner? How do you feel about doing so?

 

[wabmester]

Besides FXI, any other efficient ways to invest in the growth of China today in a targeted manner? How do you feel about doing so?

AFAIK, the only other China-play ETF is PowerShares Golden Dragon (PGJ). Both of these funds are somewhat limited in terms of number of holdings (around 25), market cap (large), sector exposure (little or no consumer sector, for example). But, I'm happy to have the exposure to China.

 

[lazyday]

FXI has a .74% ER, compared to .3% for diversified VWO.

If you're willing to stockpick, can buy ADRs. Though an ADR may attract buyers, driving price up compared to companies without ADRs. (If you do pick an ADR, please post.)

China is a great growth story, but there's also risks of corruption, repatriation, and other political risks.

Japan may be an indirect play on growth in China/Asia-ex-Japan. VPL has an ER of .18%. Not pure Japan, has 17% Australia&NZ.

VWO is about 55% Asia-ex-Japan/Oz/NZ, including 18% Korea, 13% Taiwan, 9% China.

 

[Ed_The_Gypsy]

I found Matthews Asian Growth and Income (MACSX) as a surrogate for China.

http://finance.yahoo.com/q/bc?s=MACSX&t=my

Up 13% YTD, +21.8% average annual return for the last 5 years, 10 years up, 1 year down (down 23.2% in 1997).

Their idea is not to invest in companies IN China, but companies nearby who will benefit as China grows--who sell to China, etc. I liked the concept. I figure that the Chinese economy has a lot of upside in the long run, but I am not comfortable putting my capital in-country.

My 2 centavos.

 

[dmpi]

China is a great growth story, but there's also risks of corruption, repatriation, and other political risks.

Also there is a risk of a RE and growth bubble. And its hard to say how the dollat to yuan currency will play out. China still has a large percentage of its people living on farm and villages that has yet to be put to work in the factories. So as long as money keeps flowing into china and they got stuff to seel to the rest of the world, I still see a lot of growth left.

 

[brewer12345]

I agree with Ed's approach.

 

[2soon2tell]

You might want to look at T. Rowe Price's New Asia Fund. 33% China including Taiwan and Hong Kong. 5 yr return 24.35%.

2soon

 

[astromeria]

I found Matthews Asian Growth and Income (MACSX) as a surrogate for China.

I bought MACSX almost exactly 3.5 years ago, and it's up 84.04%.

My 2 centavos.

shouldn't that be 2 yuan?!

 

[Nords]

Besides FXI, any other efficient ways to invest in the growth of China today in a targeted manner? How do you feel about doing so?

Have you read Bernstein's "Thick as a BRIC"?