China has short-term risks, long-term potential

Article Excerpt

The Chinese economy offers investors considerable long-term promise—although it faces challenges in the near term. Foremost among them is that economic activity could slow this year as the Omicron variant forces entire cities to lock down under China’s zero-COVID policy. Potential defaults by highly indebted real estate developers are also a big risk factor—as is the continuing conflict with the U.S. Still, here is one ETF that provides exposure to the top Chinese publicly listed companies. It’s for investors ready to look beyond the country’s shorter-term difficulties. ISHARES MSCI CHINA A ETF $42.14 (CBOE symbol CNYA; TSINetwork ETF Rating: Aggressive; Market cap: $922.8 million) tracks the performance of the largest Chinese companies that are listed on domestic Chinese markets and are also available to international investors. Financial Services account for 18% of its assets, while consumer defensives (17%), industrials (16%), technology (14%), materials (11%), healthcare (10%), and consumer cyclicals (7%) are other key segments. The ETF holds a large portfolio of 492 stocks with the top…