To The Moon

🌟🌟🌟China is the 2nd largest  Economy in the world.   China's GDP in the first 3 quarters of 2023 reached a total of RMB 91.3 Trillion (about USD 12.48 Trillion), growing 5.2% year on year.  In the third quarter alone, the GDP growth rate reached 4.9%, beating the median forecast of around 4.6%.

 Moody recently lowered the outlook on China's A1 debt rating to "negative" from stable.  However a number of top US investors have been buying shares of China's largest companies over the past quarter according to the recent 13F filings.

They are Appaloosa's David Tepper who increased his position in Pinduoduo (PDD) by 86.7%.  Even Michael Burry of the Big Short Fame initiated new positions in both Alibaba and JD. com.   Ray Dalio has been bullish on China too and owns PDD and FXI ETF.

$iShares China Large-Cap ETF(FXI)$ is the largest and oldest China ETF with Assets Under Management of USD4.46 billion.   In just 1 trade, FXI gives instant access to 50 of the largest Chinese stocks that trade on the Hong Kong Stock Exchange.

The Top 10 holdings include $TENCENT(00700)$ 

$Alibaba(09988)$ 

$MEITUAN-W(03690)$ 

China Construction Bank, $NTES-S(09999)$ 

Industrial and Commercial Bank, Baidu, JD. com, Xiaomi and Ping An Insurance. 

The Top 10 holdings' weightage is 56.6%.  Total number of Holdings is 51. 

Tencent is one of the largest Chinese companies known for its AI, Entertainment and holding businesses. Its services include social networks, music, web portals, ECommerce, mobile games, Internet services, payment systems and multi player online games. 

Alibaba is  one of the world's largest retailers with over 40 million active buyers and 400,000 daily product enquiries.  Alibaba is also into logistics business, Cloud Computing, Digital media and entertainment, payment systems.  In March 2023, Alibaba announced that it will split into 6 business units, each with its own CEO and Board of Directors. 

Apart from the Top 10 holdings, FXI also includes BYD, Li Auto, Yum China and many other well known Chinese companies. 

The expense ratio is 0.74%.  Distributions are paid half yearly.  The current distribution yield is 2.98%.  FXI goes ex dividend on December 20 2023.  FXI has a proud history as a consistent dividend payer.  It has paid dividends to its shareholders for 16 consecutive years. 

Performance wise, FXI is down 18% year todate almost reaching its 52 week low of USD 23.77.

According to Tipranks, FXI earns a Strong Buy consensus rating based on 41 Buys, 9 Holds and 1 Sell rating.  The average Target Price of FXI is USD 37.76, a huge upside potential of 57%.

I am bullish on FXI as I feel that it is undervalued and oversold for the huge potential it offers.  It is a great way to gain exposure to China's biggest and best companies.  FXI is low cost, well diversified and minimises my risk on single stocks. Best of all, I like the regular dividends it pays while waiting for capital growth.   The next one is due on December 20 2023 just in time for Christmas. 

Warren Buffett once said "It is wise to be Fearful when others are greedy and to be greedy only when others are fearful." 

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