Comments on: Top Performing ETFs for 2006 http://www.etftrends.com/2006/12/best_performing.html Keeping a grip on exchange traded funds (ETFs) Sat, 21 Nov 2009 23:28:06 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: balazs Fabry http://www.etftrends.com/2006/12/best_performing.html/comment-page-1/#comment-136 balazs Fabry Fri, 05 Jan 2007 00:25:07 +0000 http://etftrends.com.s14057.gridserver.com/2006/12/top-performing-etfs-for-2006.html#comment-136 2006 was “The Year” for Chinese stocks. A seemingly unquenchable investor thirst for all things Chinese helped propel the Shanghai Composite Index to a 130% gain for the year, followed closely by the Hang Seng China Enterprise Index*. Even though we explained in the previous Newsletter (December 2006 issue) that Shanghai’s stellar performance in 2006 is somewhat misleading because compilers of the Shanghai Composite Index include IPOs right from their debut day, giving the mainland index a regular and artificial boost, the triple digit gain is still remarkable. The interest in China spurred Hong Kong‘s Hang Seng Index to a 34% gain in 2006. The China Enterprise Index, which comprises major Chinese companies, or H-shares, such as PetroChina or China Life Insurance, nearly doubled in value. Thanks to the composition of the Xinhua China 25 Index, which basically has the same components as the China Enterprise Index, U.S. investors could capture the stellar performance of the Chinese stock universe. FXI** nearly doubled its value, far outperforming the PGJ***, not to mention the Dow. What do we expect in 2007? Will this trend continue? If so, how to get the best out of it? First of all, investors have to realize that most of the spectacular index gains are attributed to large cap stocks. We expect to see their strong momentum to carry well into 2007. These large cap stocks make up the Hang Seng China Enterprise and the Xinhua China 25 Indexes composition and as a result, we think these will do well in 2007. As we have previously argued, the Shanghai Composite is biased and artificially boosted the way IPOs are calculated into the index performance. With a strong IPO pipeline, Shanghai is expected to perform well in 2007 though not as spectacular as in 2006. Mega IPOs like ICBC’s $20 billion plus are unlikely to occur as the banking sector went public by 2006. If history can predict future, the Halter USX China Index (PGJ) will most likely underperform its ETF peer, FXI. We have always preferred FXI and have been vocal about it. Still, PGJ is expected to cheer investors alongside China’s overall economic growth. --------- To get the full story, visit this China stock research company from NY at <a href="http://chinavestor.com" rel="nofollow">http://chinavestor.com</a> and sign up for a comlimentory one week free trial. 2006 was “The Year” for Chinese stocks. A seemingly unquenchable investor thirst for all things Chinese helped propel the Shanghai Composite Index to a 130% gain for the year, followed closely by the Hang Seng China Enterprise Index*. Even though we explained in the previous Newsletter (December 2006 issue) that Shanghai’s stellar performance in 2006 is somewhat misleading because compilers of the Shanghai Composite Index include IPOs right from their debut day, giving the mainland index a regular and artificial boost, the triple digit gain is still remarkable. The interest in China spurred Hong Kong‘s Hang Seng Index to a 34% gain in 2006. The China Enterprise Index, which comprises major Chinese companies, or H-shares, such as PetroChina or China Life Insurance, nearly doubled in value.
Thanks to the composition of the Xinhua China 25 Index, which basically has the same components as the China Enterprise Index, U.S. investors could capture the stellar performance of the Chinese stock universe. FXI** nearly doubled its value, far outperforming the PGJ***, not to mention the Dow.
What do we expect in 2007? Will this trend continue? If so, how to get the best out of it?
First of all, investors have to realize that most of the spectacular index gains are attributed to large cap stocks. We expect to see their strong momentum to carry well into 2007. These large cap stocks make up the Hang Seng China Enterprise and the Xinhua China 25 Indexes composition and as a result, we think these will do well in 2007.
As we have previously argued, the Shanghai Composite is biased and artificially boosted the way IPOs are calculated into the index performance. With a strong IPO pipeline, Shanghai is expected to perform well in 2007 though not as spectacular as in 2006. Mega IPOs like ICBC’s $20 billion plus are unlikely to occur as the banking sector went public by 2006.
If history can predict future, the Halter USX China Index (PGJ) will most likely underperform its ETF peer, FXI. We have always preferred FXI and have been vocal about it. Still, PGJ is expected to cheer investors alongside China’s overall economic growth.

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To get the full story, visit this China stock research company from NY at http://chinavestor.com and sign up for a comlimentory one week free trial.

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