#7 - IShares MSCI China ETF (NASDAQ:MCHI)
With so much uncertainty surrounding Chinese stocks, an exchange-traded fund (ETF) is not a bad way to gain exposure. If that’s your thinking, the iShares MSCI China ETF (NASDAQ: MCHI) is a strong contender. The fund has $6.16 billion in assets under management (AUM) as of October 7, and many of the companies on this list are among the fund’s top 50 holdings.
Shares of MCHI were flat for 2024 prior to the recent surge when the stock price shot up by 43%. In fact, the five-year stock chart looks very similar to that of Alibaba, which makes sense since BABA is the fund’s second-highest weighted holding. The fund itself is a market-cap-weighted index, which means large-cap companies like Alibaba have a higher percentage of shares in the fund.
With the recent run higher, the fund is trading near its 52-week high and is showing exceptionally high volume. That will likely not be sustainable so investors should expect some downside. However, the stock does pay a semi-annual dividend with a 2.01% yield. Plus, the expense ratio of 0.59% is justifiable for a stock with this kind of growth potential.
About iShares MSCI China ETF
iShares MSCI China ETF, formerly iShares MSCI China Index Fund (the Fund), is an exchange traded fund. The Fund seeks investment results that correspond to the price and yield performance, of the MSCI China Index (the Underlying Index). The Fund is designed to measure the performance of the top 85% of equity securities by market capitalization in the Chinese equity markets.
Read More - Current Price
- $47.27
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $47.14 (0.3% Downside)
Investing in China will continue to carry some risk. In fact, many analysts already suggest that a short-term pullback is likely. But if you believe that the Chinese economy may be at a bullish inflection point, and you have the appropriate risk-tolerance, Chinese stocks could present an opportunity.
The volatility in Chinese stocks in the past five years is a reminder that what happens in China is important to investors, even those who only invest in many U.S. companies. However, with volatility expected to drive the market for some time to come, it's going to be difficult to avoid direct or indirect exposure to Chinese stocks.
The seven stocks in this presentation are just a small sample of the potential opportunities that exist. And investors should take note that there are ways to invest in the country that don't require you to invest directly in Chinese companies. For example, now could be a good time to look at iron and steel stocks or companies that directly ship to China.
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