Let’s face it — China investing has been a bit bumpy of late. That said, a China allocation can still play a big role for investors. The U.S. market remains expensive, so diversifying via the world’s other key economy can help. U.S. investors right now face a key question — how can they allocate to China while limiting risk given the country’s challenges? Investors may want to consider a China consumer ETF with an intriguing spin, like KLXY.
Why KLXY? The KraneShares Global Luxury Index ETF (KLXY) tracks the Solactive Global Luxury Index. In doing so, it charges 69 basis points to invest in global firms that could benefit from a spike in global travel. Global travel markets are set to benefit from a return of the Chinese traveler following the nation’s “Zero COVID” policy. KLXY limits its U.S. investments, too, to provide more global exposure.
See more: As Chinese Lunar New Year Nears, Consider Travel ETF KLXY
That approach makes it an intriguing option as a China consumer ETF. By avoiding firms based in China, it looks to benefit from a large Chinese consumer traveler base without direct exposure to a beleaguered corporate landscape therein.
KLXY has started hot in 2024. Having only launched last September, the strategy has returned 11.6% over the last three months. It also returned 12.8% over the last month, suggesting some appealing momentum.
Those numbers, per VettaFi, also indicate the strategy has outperformed its ETF Database Category and FactSet Segment averages. The ETF more than doubled those averages on a YTD and one-month basis. While its short history limits available track record data, its price sits above its 50-day simple moving average per YCharts.
All told, the China consumer ETF’s hot start presents an intriguing option. For those looking for exposure to many Chinese consumers with limited exposure to a complicated growth picture in that country, KXLY may be worth a look.
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