‘Hot Money’ Chasing China ETF Rally

ETF Trends

The iShares FTSE China 25 (FXI) has rallied about 30% from its June 2012 low and could be poised for further gains this year as investors chase the ETF’s strong performance.

Since the end of November, the China fund has been one of the top-selling ETFs with inflows of about $1.6 billion, according to IndexUniverse data.

Other ETFs for the world’s second-largest economy include SPDR S&P China (GXC), Guggenheim China Small Cap (HAO) and PowerShares Golden Dragon China Portfolio (PGJ). [ETFs to Play China’s Domestic Rebound]

Analysts at Stifel Nicolaus predict that China ETFs will lead gains among Asia-focused funds this year as inflows rise, Bloomberg News reports.

“We saw a lot of hot money flowing into the Philippines and Thailand ETFs, especially in the third and fourth quarters last year,” Dave Lutz, head of ETF trading at Stifel, told Bloomberg. “Lately we’ve been seeing a big rotation back into China as their economic performance started turning for the better.”

iShares FTSE China 25

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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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