Too soon for China buying

Article Excerpt

ISHARES CHINA LARGE-CAP ETF, $41.26, is a hold for safety-conscious investors. The ETF (New York symbol FXI; buy or sell through brokers) tracks the 50 largest, most-liquid Chinese stocks. It started up October 4, 2004, and investors are charged a high 0.74% MER. The units give you a 2.9% yield. Top holdings for the $4.4 billion fund are Tencent (Internet), 10.1%; China Construction Bank, 9.2%; Ping An Insurance, 7.8%; Industrial & Commercial Bank, 6.8%; Meituan Dianping (group buying/food delivery), 5.2%; China Mobile, 4.7%; Bank of China, 4.0%; CNOOC (oil), 3.5%; and China Life Insurance, 3.1%. China still has strong growth potential. However, it faces a major challenge right now from the coronavirus outbreak. Economic activity is currently at much lower levels than usual. The government has cut taxes for small businesses and ordered state-owned banks to increase lending while offering borrowers longer grace periods. China’s central bank has also cut interest rates and injected hundreds of billions of dollars into the financial system to help support banks…

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