Tuesday, December 21, 2004

BMC and Single Country ETF

No, I am not talking about the software company BMC.

I mean Brazil, Malaysia and China.

The Single-Country ETF have a good run-ups recently. Especially Brazil and Singapore for the past 3 months. I am a fan of Brazilian soccer, and new to their companies and businesses. But thier government-owned oil company Petrobras is no stranger to me.

Why is Brazil so hot? I have no idea. Their single-country ETF has gone up 26% in just 3 months. But my guess it is too high to go in now.

Malaysia stock market has gone up a fair bit recently (4% in the past 3 months). Many speculate that their currency Ringgit (RM) would be re-pegged from the 3.80 to US Dollar. It is dragged down by the weak US Dollar despite strong growth in exports. The property is picking up. I am tempted to act on the possible re-peg. So it seems logical to invest in their stocks market.

Still considering. (Hey, Time is Money! Don't Think Too Long!)

Investing in China has always been risky - the sustainability of its expansion, corporate governance of its firms, and integrity of its property rights. But those listed in HongKong Hang Seng or US stockmarkets (as ADRs) has better corporate governance. Are there any ETFs for China companies? Turned out that there are two:

1. iPower Shares Golden Dragon Halter USX China Portfolio (PGJ)
The PowerShares Golden Dragon Halter USX China Portfolio comprises U.S.-listed companies that derive most of their revenue from China. The fund's two largest holdings are PetroChina and China Mobile, which comprise 12% and 11.5% of the 38-stock portfolio. The ETF is rebalanced quarterly.

2. iShares FTSE/Xinhua China 25 (FXI)
This is a new ETF from State Street Global Advisors which has been introduced in October this year. It tracks 25 companies that trade on the Hong Kong Stock Exchange. The fund keeps nearly 60% of its assets in its top 10 holdings and a similar amount in just three sectors: energy, telecommunications, and industrial stocks.

Given the cheap expense ratio of 0.74%, FXI seems better. No wonder it has grown to over $409 million in assets since inception, and rose 29% on an annualized basis in the 12 months since end September.

Probably too high for me again. :(


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