The largest exchange traded fund tracking China, down over 20% this year, could be rolling over again following a bounce earlier this month.
The $6 billion iShares FTSE China 25 Index Fund (NYSEArca: FXI) has pulled back over the past week after rallying close it its 50-day moving average.
The China ETF, which invests in Chinese stocks available to U.S. investors, is down 21.9% so far in 2011, according to Morningstar. Many traders watch China as a leading indicator for the health of the global economy.
“The bear has been ruthless to investors in Chinese companies,” writes Gary Gordon for The Street. “Since those Oct. 3 lows, however, several facets of the Chinese ‘story’ have become more favorable. First, analysts worldwide began upgrading China stocks on historically low valuations.” [China and the European Debt Crisis]
Chinese ETFs would also benefit from progress on the European debt logjam, he said.
“So far this year, especially in the third quarter, growth in China’s imports of goods and services has exceeded export growth,” Shen Laiyun of National Bureau of Statistics, said in a WSJ.com report. “This shows that the contribution to the global recovery from China’s economy is growing.” [China ETFs Down as Economic Growth Slows]
Overall, China’s GDP for the third quarter was at 9.1%, down a bit from analysts expectations of 9.2%. Economists viewed this as evidence that China can control its economy enough to ease inflation while still allowing some growth.
Other China-focused ETFs include:
- Guggenheim China Real Estate (NYSEArca: TAO)
- SPDR S&P China (NYSEArca: GXC)
- PowerShares Golden Dragon Halter China (NYSEArca: PGJ)
iShares FTSE China 25
Tisha Guerrero contributed to this article.