Investing in China with iShares ETF
Investing in China has not been the easiest practice in the past, but more and more opportunities are arising and one of the best currently is the iShares FTSE/Xinhua China 25 Index that trades on the NYSE under the ticker FXI. This ETF gives you access to China seeking investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index.
China has been a very volatile market, thus so have any investment vehicle attributed to China. The FXI was listed in October 2004 and even through all the volatility it has returned a cumulative 70% over its lifetime. For the smart investor that likes to trade a bit and play the markets big returns are possible here. Just over the last year the FXI has traded from a high of $55 to a low of $19. Currently FXI sits at $33 on the NYSE. FXI also has a very reasonable expense ratio of only .74% and a yield of almost 2.5% currently.
Recognizing the strength of the Chinese economy, the lack of national debt and huge currency reserves FXI is an investment vehicle that must be on any investors radar going forward. A buy and hold strategy should yield big returns....just try to ignore the volatility. Buy a position and put it in the vault and you will be rewarded over the long term.
China ETFs outpaced all foreign markets Monday. The surge occurred after China's central bank said over the weekend it would allow the yuan to gradually appreciate against the dollar.
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The Shanghai Composite is down 11% year to date as China institutes measures to cool their economy and avoid a housing bubble.
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Morgan Stanley came out this week stating that the Chinese stock market is currently the most attractive in the world and should outperform going forward.
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After halting the two-day losing streak on Monday that cost it nearly 120 points or nearly 5 percent, the China stock market turned back to the downside on the following day.
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Chinese stocks surged Wednesday in their biggest gain in nearly four months on speculation Beijing plans new economic stimulus measures and other policies aimed at reviving the country's languishing markets.
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