China, with its 1.4 billion people, is overwhelming in size. Investing in China can be daunting. But it also poses a huge opportunity.
There are a number of good ways for the American investor to benefit from China's economic growth. And you don't need to know Chinese, or even learn a lot about individual companies there to profit.
Consider these Chinese investments to add some geographic diversity to your portfolio.
1. Fidelity China Region Fund (FHKCX)
If you're a Fidelity customer, you can buy and sell this fund with no transaction fee. The fund has risen in value more than 20% this year, and has an expense ratio of just 1%, which is relatively low for international funds. Major holdings include Taiwan Semiconductor, AIA Group, and the China Construction Bank. This fund has a coveted five-star rating from Morningstar.
2. iShares MSCI China ETF (MCHI)
This exchange-traded fund from Blackrock will give you exposure to large and midcap firms in China, and is designed to track the MSCI China index. Its expense ratio is just 0.62%, and top holdings including Tencent Holdings, China Construction Bank, and China Mobile. For a different mix of Chinese investments, also consider the iShares China Large Cap, and the iShares MSCI China Small Cap ETFs. This ETF is free to trade through Fidelity.
3. Kraneshares CSI China Internet ETF (KWEB)
You've heard the buzz about Alibaba, so here's a way to get in on the action. This ETF, which is less than two years old, has risen in value by more than 30% this year. It counts Tencents Holding Co. and Alibaba as its top holdings.
4. Market Vectors China AMC SME-ChiNext ETF (CNXT)
Shares of this ETF have nearly doubled this year, thanks to good performance from its mix of large and medium Chinese stocks. This ETF just began trading in July of last year, and already has assets of nearly $90 million. Top holdings include East Money Information Co., Sunung Commerce Group, and SIASUN Robot and Automation.
5. Guggenheim China Real Estate ETF (TAO)
There's been some talk of a real estate bubble in China, but it hasn't popped yet. This ETF is up more than 15% over the last 52 weeks, as the value of Chinese real estate continues upward. You may never get to own a skyscraper in Shanghai, but this is one way to get a piece of the action.
6. Yum! Brands
It's often a wise idea to invest in an American company that has a big presence in the market with which you are seeking exposure. In the case of Yum! Brands, you'd be investing in one of the top retail developers in China, with 6,800 restaurants (mostly Pizza Hut and KFC) and another 700 on the way this year.
7. Ford and General Motors
What? American automakers? Yes, the Chinese are adding new drivers every day, and seem to like U.S. made cars. The Wall Street Journal in May labeled Ford "The big up-and-comer in China," and the company has doubled its Chinese market share since 2012. GM has also seen increases in sales. Invest in U.S. automakers, and get some indirect exposure to China in the process.