FXI has “the bulk of the assets for ETF investing in China,” he said. “But the truth is: It does a terrible job capturing China. FXI has no exposure to technology and very little exposure to consumers. Eighty percent of the portfolio is invested in old-school, ex-government firms, with none of the entrepreneurial, middle-class-driven growth that most investors want from China.”
Hougan added a fund like GXC “gives you much better exposure, but investors don’t bother to look.”
iShares FTSE China 25 Index Fund
Tisha Guerrero contributed to this article.