ETF Trends
ETF Trends

For the first nine months of 2008, China pulled off a 7% growth rate, and is on schedule to meet or beat the 8% targeted rate.  If you’ve been feeling skittish, now might be the time to consider your exchange traded fund (ETF) options when it comes to this growing nation.

Xiong Bilin, a top economic planner, said the growth rate for January-September would be more than 7%. September showed improving trade, housing sales, manufacturing and car sales, reports Elaine Kuternbach for Associated Press. The official numbers will be released tomorrow. China is also on pace to surpass its target growth rate for 2009. (Is China in a bubble?)

Such growth is helping offset falling trade and export numbers, reports Elyse Andrews for Cabot. Other facts continue to support the health of China’s economy, according to The CIA World Factbook:

  • The opening of trade routes in the 1970s, and a market-oriented economy has taken China’s growth from a centrally-oriented system to a world power.
  • The currency has been tightly linked to the U.S. dollar, however, re-valued currency has taken the renminbi up 2.1% against the dollar.
  • In capital terms, the country is still lower-middle income dominated. The government faces challenges to sustain this and keep growth moving in the right direction.

How to play China with ETFs:

  • Claymore/AlphaShares China All-Cap (NYSEArca: YAO): Began trading on Monday; the fund had trading volume of more than 1.3 million shares, making it the 11th largest first-day volume for a U.S.-listed ETF ever. (Read more about this ETF).
  • Claymore/Alpha Shares China Small Cap (NYSEArca: HAO): up 88.7% year-to-date; small caps tend to do better in a recovery than large caps because they’re more nimble and quicker to react to changing economic conditions. (Read more about small-caps).
  • iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 54.2% year-to-date
  • SPDR S&P China (NYSEArca: GXC): up 62.5% year-to-date
  • PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ): up 64.6% year-to-date

For more stories about China, visit our China category.

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.