It seems even another lending rate hike can’t stop China’s exchange traded funds (ETFs) from rising. Recalled products such as toys, pet food and toothpaste haven’t significantly damaged the country’s economy or ETFs as one might expect. On Friday, China raised its benchmark rate for the fifth time this year, putting it at its highest level in 11 years. The People’s Bank of China raised its one-year lending rate to 7.29%, which is up from 7.02%, according to Vivian Wai-yin Kwok for Forbes. Meanwhile on Friday, iShares FTSE/Xinhua China 25 Index (FXI), SPDR S&P China (GXC) and PowerShares Golden Dragon Halter USX China (PGJ) all hit new highs. Year-to-date, FXI is up 40.0%, PGJ is up 35.7% and GXC is up 30.8% for the last three months since it launched in March.
China continues to raise interest rates in an attempt to keep its economy from growing out of control. The performance of its ETFs and the continued economic growth show that China is practically impervious to the subprime or credit problems that are affecting many other global markets, says Carl Delfeld for ETF XRAY. As markets move in cycles, most fund managers foresee a correction in China as a long way off. Most expect the good fortune to continue in the near future but at a less hectic pace, reports David Hoffman for Investment News.
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