We are rapidly approaching the end of the second quarter and it remains unclear what role China will play in the global growth story. The International Monetary Fund currently projects Chinese growth at a rate that would be the envy of most developed economies and above the average for emerging markets, but the pace doesn‚Äôt match China‚Äôs meteoric growth of recent memory. If you do wish to invest in China‚Äôs potential growth, one way to dip your toe in those waters is through the iShares China Large-Cap ETF (FXI).
This fund attempts to match the price and yield performance, before fees and expenses, of an investment fund focused on the 25 largest and most liquid Chinese companies traded on the Hong Kong Stock Exchange. These companies operate in mainland China and include red chips (Chinese companies incorporated outside China), p chips (Chinese companies incorporated in the Cayman Islands, Bermuda and the British Virgin Islands) and H Shares (companies incorporated inside mainland China).
The exchange-traded fund (ETF) is down about 1% this year, largely due to drops in February and March. FXI has nearly recovered from these dips and is currently trading well above both its 50- and 200-day moving averages. This ascent reflects the slightly positive May Purchasing Managers‚Äô Index, which indicated continued soft growth. FXI also offers a yield of 2.76%.
Read more about this China-focused exchange-traded fund at Eagle Daily Investor.