China’s potential rewards match its risks

Article Excerpt

Massive growth in the export of cheap manufactured goods has driven China’s economic success over the past two decades. However, developed countries—and especially the U.S., given newly imposed tariffs—are increasingly reluctant to buy more Chinese goods. As a result, China will need to find other sources of growth. Here is one ETF that provides exposure to the country’s top publicly listed companies. ISHARES MSCI CHINA ETF $65 (Nasdaq symbol MCHI; TSINetwork ETF Rating: Aggressive; Market cap: $3.5 billion) tracks the performance of the largest publicly listed Chinese companies. Technology stocks account for 29% of its assets, while Financial Services (22%), Consumer cyclical (19%), Real estate (5%), Industrials (5%), Energy (4%) and Communication Services (4%) are other key segments. The ETF holds a large portfolio of 287 stocks, although the top 10 make up a high 53% of its assets. They are Tencent Holdings (Internet services, 16.3%), Alibaba Group (e-commerce, 12.7%), China Construction Bank (5.2%), Baidu ADR (Internet services, 4.0%), Industrial and Commercial Bank of China (3.0%),…

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