Investing in China

The Chinese economy is growing at a rate of about 2 times to 3 times the rate of developed market economies. Consequently, the chances of making a buck on investments might reasonably be assumed to be better on investments in Chinese based companies than those of developed markets assuming the valuations of those companies are not unreasonable.

There are three principal methods that a US citizen can use to invest in Chinese companies. 1. U S listed Chinese companies 2. open end mutual funds 3. exchange traded mutual funds. There are quite a few Chinese companies listed on US stock exchanges. Among the larger Chinese Companies are the following which can be bought on US exchanges.

Aluminum Corp of China ACH aluminum mfg. 3.4 billion cap
Bank of China BACHY bank about 100 billion cap
China Life Ins. LFC life insurance 116 billion cap
China Petroleum and Chem. SNP oil and chemicals 72 billion cap
CNOOC CEO oil 52 billion cap
China Mobile CHL cell phone 190 billion cap
China Telecom CHA 31 billion cap

There are quite a few other Chinese companies listed on US exchanges. These are just a few.

There are about 8 exchange traded index funds available.

iShares FTSE/Xinhua China 25 index fund FXI 5.5 billion cap
PowerShares Golden Dragon Halter USX China Portfolio PGJ 232 million cap
SPDR S&P China etf GXC 180 million cap

The others are specialized and very small cap.

Among closed end Chinese funds which are traded as etfs are the following:

Greater China Fund GCH 202 million cap 10 year return 14%
China Fund CHN 400 million cap 10 year return 17%
JF China Region Fund JFC 60 million cap 10 year return 9%
Morgan Stanley China A Shares Fund CAF 270 million cap (this fund invests in A share securities that are not available to foreign investors generally) It has been in existance only 2 years.
Templeton Dragon Fund TDF 711 million cap 10 year return 15%

Among open ended funds:

Fidelity China Region Fund FHKCX no load 10 year return 8%
Guinness Atkinson Chin & Hong Kong ICHKX no load 10 year return 9%
Matthews China MCHFX no load 10 year return 14%
AIM China Class A load 3 year return 16% has not been in existence 10 years.