China ETFs: An Opportunity, with Risk | ETF Trends

China is producing great opportunities for intrepid investors who don’t mind some risk in their diet. Exchange traded funds (ETFs) focused on China are a nice option to get broad-based exposure to help stomach the risk.

The Shanghai Composite is down 22% year-to-date with much of the sell-off because of what may because of economic overheating. Investors’ nerves have been soothed recently; over the past several days, the Shanghai Composite gained 5.7%. Alexandra Twin for CNN Money says that it can’t be called “problem solved,” though: mix in the European debt crisis and the yuan’s uncertainty and there’s still likely to be some volatility. [ETF Providers Expanding into Asia.]

But that doesn’t necessarily mean that China will languish.

Langi Chiang , Samuel Shen and Edmund Klamann for Reuters report that China is expecting strong growth for the remainder of 2010, and no further economic stimulus is needed. A forecast of 8.5% growth is predicted, with the major risk being consumer inflation. Consumer inflation also eased to 2.9% in the year to June, from 3.1 % in the 12 months to May. [China Tries to Cool Off.]

For more stories about China, visit our China category. You can find a complete list of ETFs that give exposure to China by visiting our ETF Analyzer, including these:

  • iShares FTSE/Xinhua China 25 (NYSEArca: FXI)
  • SPDR S&P China (NYSEArca: GXC)
  • PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ)
  • Claymore China Technology (NYSEArca: CQQQ)
  • Global X China Consumer (NYSEArca: CHIQ)

Tisha Guerrero contributed to this article.

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.