China Fund Awaits a Market Bounce

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.
[renminbi bills]

This week’s ETF Talk moves on to another new category of top-performing exchange-traded funds (ETFs). The funds of the next three ETF Talks fall under the emerging markets category and offer the three best-performing ETFs for the first half of the year in that category.

The first and foremost is Market Vectors ChinaAMC SME-ChiNext ETF (CNXT).

If you can recall the first half of this year, it should come as no surprise that a fund focused on China tops this list. In fact, only two funds in the top 10 on this metric don’t focus on China; however, each of the top three funds that will be covered in the next several ETF Talk articles provide a different take on the Asian giant.

View the current price, volume, performance and top 10 holdings of CNXT at ETFU.com.

CNXT invests in Chinese companies listed on the small and medium enterprise (SME) and ChiNext boards of the Shenzhen Stock Exchange. The ChiNext board consists of fast-growing and innovative, usually high-tech, companies (much like the American Nasdaq Index), while the SME is focused on smaller companies.

Although China’s market has suffered greatly since the midpoint of 2015, in the first half of the year, this fund performed strongly, posting a 64.73% gain. With only $53.9 million in assets managed, CNXT falls beneath my recommended threshold for investment.

However, this ETF’s strategy is one that is worth bringing to your attention. The more knowledge you have as an investor, the better you can make informed decisions.

cnxt_0915

In regards to diversification, 28.8% of this fund’s assets compose its top 10 largest holdings. This list contains Eternal Asia Supply Chain Management Ltd., 4.95%; Suning Appliance Co. Ltd., 3.87%; Hangzhou Hikvision Digital Technology Co. Ltd., 3.23%; East Money Information Co. Ltd., 3.11%; and Beijing Kangde Xin Composite Material Co. Ltd., 2.88%. The most dominant sector holdings for the fund are in technology, industrials and consumer cyclicals.

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Although the Chinese market is battered, it eventually may move back into investors’ good graces. If history is any indication, Market Vectors ChinaAMC SME-ChiNext ETF (CNXT) could be a solid beneficiary of such a shift.

Remember to look for the current price, volume, performance and top 10 holdings of CNXT at ETFU.com.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about an international buyback fund. I also invite you to comment in the space provided below.

 

previous article

This week, we’ll touch on the potential revenue side, as well as how all of this shakes out relative to Wall Street expectations.

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