RiskReturnOptimizer

Oil Services Pushing Higher

TAO is very interesting play right now. It includes the biggest, most well-known real-estate companies in Hong Kong. For those familiar with Hong Kong, the top 10 wealthiest families all have strong ties to local real estate development, so they have strong incentive to support a growing and vibrant Hong Kong property market. In addition, TAO firms now can participate in growing China's residential and commercial real estate markets. In a few years, it is possible that they can also play in Taiwan's real estate market (pending new regulations opening up Taiwan market to Chinese investments).

From the short-medium term perspective, TAO is uniquely positioned to benefit from the ultra-low interest rate in Hong Kong. As the HK$ is pegged to US$, low US interest rate tends to translate to low interest rate in HK. But, HK is not recovering from real estate bubble (at least not in the same scale as US subprime mortgage). With the latest announced stimulus, Hong Kong is bouncing back quite nicely.

The only challenge is that TAO is a relatively unknown ETF, drawing less money than EWH. But, sophisticated professional and retail investors will recognize that TAO is the best, most liquid play in the rebound in HK property market (without having to physically own property in this beautiful island).

British legal / accounting system and one of the most open capitalist markets in the world are two safety nets for foreign investors concerned about lack of transparency and liquidity.