China ETF’s 24% Rally Trounces Rivals

ETF Trends

PowerShares Golden Dragon China Portfolio (PGJ) is leaving its peers in the dust for 2013 as the ETF benefits from an outsized position in the tech sector while mostly avoiding beaten-down financial stocks.

PGJ has posted a total return of 24.3% so far this year, according to Morningstar performance data. The funds holds about $200 million of assets.

The iShares China Large-Cap (FXI) is the largest ETF tracking Chinese stocks with about $5.2 billion in assets. FXI is down 12.1% year to date.

The massive disparity in performance can be explained by different sector exposure.

For example, FXI has 53% of its portfolio in financial stocks, a big concentration in one sector. Meanwhile, the outperforming PGJ has 52% in the technology sector and only about 1% in financial stocks, which have been hammered lately on concerns China was facing a credit crunch. [SHIBOR Woes Could Slam These ETFs]

Global X China Financials ETF (CHIX) is off 13.3% in 2013, while Guggenheim China Technology ETF (CQQQ) is up nearly 25%. [Tech ETFs: Best of The China Bunch]

PowerShares Golden Dragon China Portfolio

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The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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