Categories: AsiaExchange Traded Funds (ETFs)International Investing

China’s Expanding Middle Class May Propel Profits

China’s population is not just expanding but is getting wealthier and more urban than at any time in its long history. Further, the Chinese government has an explicit policy to refocus its economy towards domestic consumption, rather than infrastructure investment. This expanding middle class is explicitly targeted by Global X China Consumer ETF (CHIQ).

CHIQ is designed to reflect the performance, before fees and expenses, of an index of companies that have their main business operations in the consumer sector and are domiciled or have their main business operations in China. The non-diversified fund invests primarily through American and Global Depository Receipts.

CHIQ has gained 9.55% so far this year, after recovering from a sharp drop in July and a minor dip in October. Last year, the fund gained 8.4%. If you like income, the fund is yielding 1.05%.

The fund’s top 10 holdings make up 48.45% of its assets. Those companies include Dongfend Motor, 5.19%; Tingyi Holding Corp., 5.15%; Guangzhou Auto Group, 5.04%; China Resources Ent., 4.91%; and Hengan International, 4.84%. Not surprising for a consumer-focused exchange-traded fund (ETF), 57.7% of its holdings are in the consumer discretionary sector and 33.85% are in the consumer staples sector. There also are some holdings in industrials, technology and healthcare.

China is seeking to advance beyond its status as the world’s biggest emerging market to become a middle-class behemoth. This transition marks a fantastic opportunity for growth. And Global X China Consumer ETF (CHIQ) is a fund that is designed to take advantage of that opportunity

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Exclusive ETF Talk: Another Golden Opportunity

In case you missed them, check out my articles on Chinese ETFs from the last five weeks: HAO, PGJ, GXC, MCHI and FXI. I also invite you to comment in the space provided below.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/