China’s economy this year has been humming along like a well-oiled machine. So it’s no surprise that providers are rolling out more exchange traded funds (ETFs) to target the economy in unique and interesting ways.
Global X followed up its launch of Global X China Consumer ETF (NYSEArca: CHIQ) and Global X China Industrials ETF (NYSEArca: CHII) with three more funds this and nex week:
- Global X China Technology (NYSEArca: CHIB)
- Global X China Financial (NYSEArca: CHIX), launching tomorrow
- Global X China Energy (NYSEArca: CHIE), launching next week
CHIB is broken down into three areas: internet, 50%; telecommunications, 30.8%; and hardware and software, 19.2%. Global X CEO Bruno del Ama notes that Chinese citizens are increasingly using and gaining access to the internet, which will boost demand for new technology.
CHIX is broken down into banks, 44.3%; real estate, 31.4%; and insurance, 24.4%. Del Ama said that credit availability in China is on the increase as the country’s population begins to consume more products and services. (China’s reverse brain drain).
China’s economy grew 8.9% in the third quarter, and is helping lead Asia out of an economic slump. That being said, the economy faces challenges next year. One way the government is working to ensure that growth continues is by enacting measures to drive domestic consumption, Bloomberg reports.
China will extend subsidies for purchases of cars, appliances and farming equipment, and will continue appliance trade-in subsidies past May 200. Motorcycle subsidies will continue until January 2013. (Where the BRICs are today). As consumer demand increases, the flow of credit should follow.
But energy could be the most interesting story: in the near future, del Ama says, China is projected to be one of the highest energy-consuming nations in the world. Not only is demand on Chinese soil picking up, but China is also getting into energy development in other areas of the world, such as Africa. China’s use of green energy also outpaces that of most other nations. (What China is doing for wind energy).
For more stories about new ETFs, visit our new ETFs category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.