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Topic: How To Invest

ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $35.84 – New York symbol FXI

ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $35.84 (New York symbol FXI; buy or sell through brokers) is an exchange traded fund that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest, most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on New York.

The fund’s top holdings are China Construction Bank, 9.0%; Tencent Holdings, 8.8%; China Mobile, 7.6%; Industrial & Commercial Bank, 6.9%; Bank of China, 6.2%; PetroChina, 4.2%; China Shenhua Energy, 4.1%; Agricultural Bank of China, 4.0%; China Life, 4.0% and China Petroleum, 4.0%.

The fund’s holdings give it the following industry breakdown: Financials, 56.2%; Telecommunications, 13.8%; Oil and Gas, 12.2%; Technology, 8.8%, Basic Materials, 4.1%; Consumer Goods, 2.4%; and Industrials, 2.4%. Its expense ratio is 0.74%.

Chinese stocks are down 6% from the start of this year. That’s mainly because of two investor concerns: rising Chinese debt levels and worries that the country’s economy will continue to lag, along with its exports to Europe and the U.S. However, China’s long-term outlook is positive.

iShares FTSE/Xinhua China 25 Index Fund is a buy for safety-conscious investors who are willing to accept some risk.

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