China ETFs: Opportunity, Mixed With Risk

 |  Includes: CHIQ, CQQQ, FXI, GXC, PGJ
by: Tom Lydon

China is producing great opportunities for intrepid investors who don’t mind some risk in their diet. ETFs focused on China are a nice option to get broad-based exposure to help stomach the risk.

The Shanghai Composite is down 22% year-to-date with much of the sell-off because of what may because of economic overheating. Investors’ nerves have been soothed recently; over the past several days, the Shanghai Composite gained 5.7%. Alexandra Twin for CNN Money says that it can’t be called “problem solved,” though: mix in the European debt crisis and the yuan’s uncertainty and there’s still likely to be some volatility.

But that doesn’t necessarily mean that China will languish.

Langi Chiang , Samuel Shen and Edmund Klamann for Reuters report that China is expecting strong growth for the remainder of 2010, and no further economic stimulus is needed. A forecast of 8.5% growth is predicted, with the major risk being consumer inflation. Consumer inflation also eased to 2.9% in the year to June, from 3.1 % in the 12 months to May.

You can find a complete list of ETFs that give exposure to China by visiting our ETF Analyzer, including these:

  • iShares FTSE/Xinhua China 25 (NYSEARCA:FXI)
  • PowerShares Golden Dragon Halter USX China (NYSEARCA:PGJ)
  • Claymore China Technology (NYSEARCA:CQQQ)
  • Global X China Consumer (NYSEARCA:CHIQ)

Tisha Guerrero contributed to this article.

Disclosure: None