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Update :iShares Xinhua China 25 Index Fund (NYSE: FXI)

|Includes: EWH, iShares China Large-Cap ETF (FXI)

 

 

Originally recommended on Feb. 16/09 (IWB #2907) at $26.81. Trading Friday at $44.52 (all figures in U.S. dollars).

 

iShares MSCI Hong Kong Index Fund (NYSE: EWH)

 

Originally recommended on Feb. 16/09 (IWB #2907) at $9.74. Trading Friday at $19.41 (all figures in U.S. dollars).

 

I last updated these ETFs back in June 2009. At that time, I suggested taking half profits when FXI was trading at $37.37 and EWH was trading at $14.48. Both have been very volatile since but EWH has been a little less so, probably since it has a higher yield and more exposure to Hong Kong. Both have had a great runs since September, reaching nearly $48 and $20.24 respectively before pulling back over recent concerns that China was going to dampen its growth.

 

Despite the pull-back, you're still in the money since the last update. But both ETFs have been trading in a narrow range over the last 52 weeks.

 

Since we originally recommended these ETFs there have been a number of new vehicles brought to the market that provide exposure to China in more interesting ways and I will discuss some of these in a future issue as I still believe in the China story.

 

At this point I would suggest selling FXI for a profit of 61%. Hold EWH for the yield (2.59%).

 

Action now: Sell FXI and Hold EWH.




Disclosure: long EWH