China ETF’s 24% Rally Trounces Rivals
July 26th, 2013 at 8:51am by John Spence
PowerShares Golden Dragon China Portfolio (NYSEArca: PGJ) is leaving its peers in the dust for 2013 as the ETF benefits from an outsized position in the tech sector while mostly avoiding beaten-down financial stocks.
PGJ has posted a total return of 24.3% so far this year, according to Morningstar performance data. The funds holds about $200 million of assets.
The iShares China Large-Cap (NYSEArca: FXI) is the largest ETF tracking Chinese stocks with about $5.2 billion in assets. FXI is down 12.1% year to date.
The massive disparity in performance can be explained by different sector exposure.
For example, FXI has 53% of its portfolio in financial stocks, a big concentration in one sector. Meanwhile, the outperforming PGJ has 52% in the technology sector and only about 1% in financial stocks, which have been hammered lately on concerns China was facing a credit crunch. [SHIBOR Woes Could Slam These ETFs]
Global X China Financials ETF (NYSEArca: CHIX) is off 13.3% in 2013, while Guggenheim China Technology ETF (NYSEArca: CQQQ) is up nearly 25%. [Tech ETFs: Best of The China Bunch]
PowerShares Golden Dragon China Portfolio
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