The Chinese yuan is interesting to many investors, but some say the best way to play the it is simply not to at all. Instead, they say, it might be wise to look around for other exchange traded funds (ETFs) to benefit from it.
ETFs that focus on the yuan may be one way to play the fact that China has agreed to allow its currency to float. But seeing real gains may take longer than most investors will be patient. The solution? It could be commodities, says Lara Crigger for Index Universe. [Time to See Returns With the Yuan?]
Commodities may benefit from the yuan’s appreciation, thanks to greater purchasing power. China already is one of the world’s largest buyers – if not the largest – of many commodities, such as copper and steel. Giving them more purchasing power than before may kick off an even bigger spending spree. [Base and Industrial Metals Highlight.]
For more stories about the yuan, visit our yuan category.
Look for support in metals prices and commodity funds, as the demand for these products may increase as China’s buying power grows. Watch the following ETFs for signs of heavy spending in China. You can learn more about each by visiting our ETF Resume page, which will give you information on holdings, composition, a fact sheet, prospectus and customizable charting.
- PowerShares DB Base Metals ETF (NYSEArca: DBB)
- Market Vectors Steel ETF (NYSEArca: SLX)
- Global X Copper Miners (NYSEArca: COPX)
- iPath DJ-UBS Aluminum TR Sub-Index (NYSEArca: JJU)
Tisha Guerrero contributed to this 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.