ETF Trends
ETF Trends

China’s exchange traded funds (ETFs) have taken their drubbings this year, but certain cities within it still reign supreme with regard to how they contribute to the overall economy.

Shanghai tops a list of Chinese cities and their business conditions recently released by The Economist.  The list is made up of 44 Chinese cities that were compared in five areas: economic performance, market opportunities, labor market, infrastructure and environment.

The port city of Shanghai was deemed the top city and the best place to do business in mainland China. However, the list is on a scale from 1-5, and Shanghai landed at 3.42, seemingly indicating that there’s some room for improvement.

Not far behind Shanghai was the swiftly growing Guangzhou and the Olympics host, Beijing.  Guangzhou is a city that is tops for infrastructure, while Beijing is the home to the best labor market.

Some of the top 15 cities include larger cities, focusing on the boom in the domestic market.  Some of these cities include Tianjin and Chengdu.

Some smaller cities have also performed well.  Cities with lower external trade exposure have shown promising trends during the recent global economic slowdown.  These cities are expected to do nicely over the next decade or so as the Chinese economy matures and no longer relies so heavily on exports for growth.

When China resumes the uptrend that dominated much of 2007, perhaps some of these cities will be able to capitalize and play to their strengths.  Some ETFs looking to capture this continued growth include:

  • iShares FTSE/Xinhua China 25 Index (FXI), down 28.4% year-to-date
  • SPDR S&P China (GXC), down 31.9% year-to-date
  • PowerShares Golden Dragon Halter USX China (PGJ), down 32.9% year-to-date
  • NETS Hang Seng China Enterprises Index (SNO), down 17.4% since May 14 inception
  • Claymore Alpha/China Small Cap (HAO), down 26.9% since Jan. 30 inception

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.