Despite a major sell-off in the late summer that dragged the country into a bear market, Chinese stocks and country-specific exchange traded funds have rebounded and remain the best performing investment this year.
Among the top performing ETFs of the year, the Market Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: CNXT) surged 49.5%, Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (NYSEArca: ASHS) jumped 32.9%, PowerShares China A-Share Portfolio (NYSEArca: CHNA) increased 31.9%, Powershares Golden Dragon China Portfolio (NYSEArca: PGJ) gained 21.4% and KraneShares CSI China Internet ETF (NasdaqGM: KWEB) returned 21.1%.
CNXT and ASHS, which lean toward more Chinese middle-capitalization companies that trade on the mainland, better reflected the more nimble and smaller Chinese A-shares stocks that rallied this year. [A Critical China A-Shares ETF Consideration]
While CHNA ranks among the top best ETFs of the year, Invesco PowerShares is set to close the $5.8 million ETF on March 18, along with a number of other fund strategies. CHNA has been waiting to gain access to the Chinese A-shares market through a quota system for foreign investors and has utilized futures contracts in the meantime. However, despite expanding quotas out of China, PowerShares has not met the cut. [Changes Coming for Some PowerShares ETFs]
Meanwhile, PGJ and KWEB are capitalizing on the strong growth in Chinese tech stocks, notably in the rapid rise in social media and e-commerce names. Unlike other broad China ETFs, PGJ includes a hefty 44.3% tilt toward information technology companies. KWEB specifically targets Chinese internet firms. [Refining The Approach To China ETFs]
The Shanghai Composite Index is on pace to end the year as one of Asia’s best-performing major indices, rising 9.3% as of Monday’s close, even after plunging as much as 43% over the summer, reports Gregor Stuart Hunter for the Wall Street Journal.