ETF Trends
ETF Trends

Exchange traded funds (ETFs) tracking China have been weak lately after a recent report showed manufacturing growth slowed in April.

China’s markets and ETFs continue to wrestle with inflationary pressures. Overall, Chinese banks have reported better-than-expected earnings.

As liquidity fears toward Asian stocks are fading, Murray Coleman for Barron’s reports that valuations still look good and earnings forecasts will continue to support this trend. [China ETFs in Focus After Inflation Rises 5.4%.]

Andy Rothman with CLSA has written up some statistics on China, from headline data from its sixth census, which was conducted in November. This further supports investment activity in this region:

  • The pace of urbanization accelerated. The share of Chinese living in urban areas rose to 49.7% from 36.2% in 2000.  In the last decade, the average annual net increase in the urban population (natural as well as from migration) was 20.7 million, up from 15.7 million per year during the 1990-2000 period.
  • The ratio of Chinese with a junior college or higher-level degree rose sharply, to 8,903/100,000 from 3,611/100,000 in 2000, providing a much more educated workforce.  The illiteracy ratio fell to 4.08% from 6.72% in 2000.
  • China continues to age, with the 60-and-older share of the population up to 13.26% from 10.33% in 2000. The coastal population is aging at a faster pace than the rest of the country.

Long Chinese ETFs:

  • iShares FTSE/Xinhua China 25 (NYSEArca: FXI)
  • SPDR S&P China (NYSEArca: GXC)
  • PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ)
  • The Market Vectors China ETF (NYSEArca: PEK)
  • Guggenheim China Real Estate ETF (NYSEArca: TAO)

iShares FTSE/Xinhua China 25


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.