Nevertheless, there are still some pockets of uncertainty. Some investors argue that weakness persists in the Chinese financial sector and on homebuilders after a housing boom.
“Getting comfortable with the financial positions is the biggest challenge.” Jason Wolf, a portfolio manager for Marty Whitman’s Third Avenue Management, said in the article.
The large China ETFs have a heavy tilt toward the financials sector. FXI allocates over 50% of its portfolio to the sector, GXC has 25.5% and MCHI includes 31.4%.
On the other hand, investors can consider small-cap China ETFs. The Guggenhiem China Small Cap ETF (NYSEArca: HAO) and iShares MSCI China Small Cap Index Fund (NYSEArca: ECNS) both hold heavy positions in industrial and consumer sectors. HAO has a 9.7 P/E and a 0.8 P/B. ECNS has a 9.1 P/E and a 0.8 P/B. [Small-Cap China ETFs to Capture Regional Stimulus Measures]
For more information on China, visit our China category.
Max Chen contributed to this article.