A look at some the largest China exchange traded funds could imply this has been a lost year for ETFs providing access to the world’s second-largest economy.
However, there have been pockets of impressive among small, less mainstream China ETFs in 2013 with the Powershares Golden Dragon Halter USX China Portfolio (NYSEArca: PGJ) being among the China funds that proves 2013 has not been a lost year for select Chinese stocks.
PGJ has surged 52% this year while attracting $28.8 million of its $318.6 million in assets under management. That during a year in which some of the largest China ETFs have bled assets. PGJ’s impressive run may not be over. [A Strong Year for Some China ETFs]
With Tuesday’s “advance, PGJ is now back above the 50-day moving average. We should eventually see the 20-day exponential moving average cross through the 50-day exponential moving average and begin to separate,” according to Deron Wagner of Morpheus Trading Group.
PGJ has traded lower over the past two months with the most noticeably decline occurring from Oct. 18 to Nov. 7. The fund has since reclaimed most, though not all of those losses.
“Prior to breaking the downtrend line, PGJ formed two higher lows within the base, which is what we typically look for in most consolidation patterns. Volume was also quite bullish, as it dried up considerably in late November. We look for the price action to push higher and eventually break out to new 52-week highs,” added Wagner.
PGJ currently trades about 4.4% below its 52-week high. Much of the ETF’s allure to investors has been driven by its noticeable lack of exposure to state-run banks and oil companies coupled with its heavy weights to high-flying Chinese Internet stocks. [10 ETF Investments That Really Delivered in 2013]
While not a pure play tech ETF, that sector represents over 55% of PGJ’s weight and seven Internet stocks are found among the fund’s top-10 holdings, including Ctrip.com (NasdaqGM: CTRP), Baidu (NasdaqGM: BIDU) and Sina (NasdaqGM: SINA).
PowerShares Golden Dragon China Portfolio