China Real Estate ETFs May Be Undervalued

Includes: IFAS, TAO, YAO
by: Tom Lydon

There is no doubt that China is becoming an economic powerhouse. The Asian nation’s ETFs are abundant with opportunities, and one of the most notable ones could be in its real estate sector, which one study found was undervalued.

Comparing price-to-book ratios to return on equity, the Chinese real estate market was the most undervalued when compared to other high-growth nations like India and Hong Kong, comments Kevin Grewal for TheStreet. Some expert analysts estimate that the Chinese real estate sector has underperformed the benchmark MSCI China index by almost 30%

Additionally, recent steps to raise China’s bank reserve requirements could dampen growth and put further downward pressure on property prices.

Still, consumers may start to buy property again, and Credit Suisse (NYSE:CS) is bullish on property developers, construction and contracting.

  • Claymore/AlphaShares China Real Estate (NYSEArca: TAO)


  • Claymore/AlphaShares China All-Cap (NYSEArca: YAO). YAO provides exposure to Chinese lenders China Construction Bank (OTCPK:CICHF) and Bank of China (OTCPK:BACHY), along with construction and contracting giant China Overseas Land & Investment.


  • iShares FTSE/NAREIT Asia (NYSEArca: IFAS). IFAS allocates more than 8% of its assets to Chinese real estate holdings.

Max Chen contributed to this article.