Stocks in China are hot, and I mean smoking hot, with HUGE gains during the past month.
The table below shows just how powerful the upside has been in exchange-traded funds (ETFs) pegged to the various segments of the Chinese equity market. From small caps to financials to technology to A-shares, the bull market is in full effect in China. Here’s a list of the top funds by Month-to-Date (MTD%) percentage gains (funds over $50 million in assets).
| Ticker | Name | MTD% | ASSETS ($MLN) |
|---|---|---|---|
| HAO | GUGGENHEIM CHINA SMALL CAP E | 22.19 | 260.91 |
| CHIQ | GLOBAL X CHINA CONSUMER ETF | 15.50 | 116.11 |
| CHIX | GLOBAL X CHINA FINANCIALS | 15.05 | 102.10 |
| CQQQ | GUGGENHEIM CHINA TECHNOLOGY | 14.06 | 103.51 |
| FXI | ISHARES CHINA LARGE-CAP ETF | 13.99 | 6,888.78 |
| MCHI | ISHARES MSCI CHINA ETF | 13.93 | 2,234.22 |
| GXC | SPDR S&P CHINA ETF | 13.66 | 1,267.50 |
| YAO | GUGGENHEIM CHINA ALL-CAP ETF | 13.06 | 58.40 |
| KWEB | KRANESHARES CSI CHINA INTERN | 12.02 | 153.78 |
| ASHS | DEUTSCHE X-TRACKERS HARVEST | 9.33 | 64.16 |
| PGJ | POWERSHARES GLD DRG CHINA | 8.66 | 226.67 |
| ASHR | DEUTSCHE X-TRACKERS HARVEST | 7.13 | 1,233.89 |
| PEK | MARKET VECTORS CHINAAMC A-SH | 6.90 | 119.40 |
| CNXT | MARKET VECTORS CHINA AMC SME | 6.33 | 66.72 |
As you can see, funds like the Guggenheim China Small Cap (HAO), with a 22.19% gain, and the Global X China Consumer ETF (CHIQ), up 15.5%, are lighting up the performance charts.
Now, there are many reasons for the latest move higher in Chinese stocks, including the government’s recent announcement of plans to build additional ports, railways and roads.
Then there’s the question of valuation.
Despite their recent run higher, Chinese stocks actually are cheap. At a current price-to-earnings ratio (P/E) of 10, stocks in China are cheap compared to the S&P 500, which currently trades at a P/E of about 17. This tells us there’s more value in Chinese stocks, and that’s another reason why money will likely keep flowing to China.
Yet perhaps the big driver here is the People’s Bank of China, which has tipped its hat on plans (or at least the willingness) to lower interest rates if the economy doesn’t meet the 7% gross domestic product (GDP) growth target.
For Chinese policymakers, this benchmark is crucial, and they know it. And given the demonstrated link between accommodative central bank policy and higher nominal stock values, it’s no wonder why Chinese stocks are spitting bullish fire.
Right now, subscribers to my Successful ETF Investing newsletter are profiting from several ETFs pegged to China and the Chinese economy. If you’d like to know how to get in and ride the Chinese dragon higher, then I invite you to check out Successful ETF Investing today.
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Introducing the ETFU.com Database
The recent rollout of the ETF University website, or ETFU.com, has been a big success. If you have visited our newest education-oriented site devoted to exchange-traded funds, then I just want to say — thanks!
If you haven’t yet had a chance to visit ETFU.com, then now you have even more reason to give a look, as we have just upgraded the content at the site to feature our new, comprehensive ETFU.com Database.
This database is designed to give you all the information you need — and then some — about any ETF. What kind of information am I talking about? Well, to start with, you get all of the key vital statistics on any fund you select. These statistics include a basic description of the fund and which index it’s based on, along with the fund’s primary objective.
Then you get basic vitals such as current price, percentage change from the prior day’s close, trading volume, assets under management, expense ratio and the average daily trading volume during the past 100 days. You also get historical performance data (in percentage terms) for one week, one month, 100 days, year to date and one year.
Yet perhaps the best features, and certainly my personal favorites, when it comes to the content on the new ETFU.com Database are the Portfolio Stats, Technicals and, of course, the large price chart. In just a glance at these sections, I can get near-instant data on key metrics such as yield, P/E ratio, percentage the current price is from its 50- and 200-day moving averages and where the fund stands in relation to its 52-week high.
I know that from now on, when I research ETFs, the first place I’m going to start is the ETFU.com Database — and I invite you to do the same.
It’s Not the Fish
“Many men go fishing all of their lives without knowing that it’s not the fish they are after.”
— Henry David Thoreau
When it comes to purpose in life, it’s essential that we all make sure we know what really matters. Or, to put it poetically, whenever you go fishing, remember that it’s not the fish you’re after.
Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.
In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about the best-performing ETFs of Q1 2015. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.
Upcoming Appearance
I invite you to join me at the MoneyShow Las Vegas, May 12-14, 2015. With stock picking taking on renewed importance as the market shows signs of volatility, this event offers an opportunity to hear from a number of experts, including my Eagle Financial Publications colleagues Mark Skousen, Chris Versace and Bryan Perry.
Be a guest of Eagle Financial Publications and register for FREE by using priority code 038656 and calling 800-970-4355 (toll free in the United States and Canada) or signing up online.
