FXI iShares China Large Cap ETF - My Tactical Bet on Chinese Stocks
πππChina's GDP in the first quarter of 2024 has increased by 5.3% year on year. Its economy has continued its upward trend since last year. $iShares China Large-Cap ETF(FXI)$ is also rising. FXI ETF shares are up 1.8% today and has risen 3.6% year todate. However it is still down 16.9% in 2023.
FXI tracks a market cap weighted index of the 50 Largest Chinese Stocks traded on the Hong Kong Stock Exchange.
In just 1 trade I gain access to the best Chinese blue chips stocks. The Top 10 holdings include $Alibaba(BABA)$
Top 10 holdings weightage is 57%. Total number of holdings is 51.
The current distribution yield is 3.19% and is paid every 6 months.
Recently on April 16, Fitch Ratings has revised its outlook of Alibaba and Tencent to Negative from Stable. However Fitch has also reaffirmed both Alibaba and Tencent 's senior unsecured rating and the rating on their outstanding senior unsecured notes at 'A+'.
As a result, Alibaba have dropped 5.5% for the week while Tencent is down 3%.
Meituan operates a web based shopping platform for locally found consumer products and retail services. It also offers deals of the day by selling vouchers on local services and entertainment , dining, delivery, travel and other services in China. Meituan share price is also down 5.8% for the week.
Netease develops and operates online PC and mobile games, advertising services, email services and ECommerce platforms in China. It is Tencent's competitor but on a smaller scale. Netease is down 2.1% for the week.
Performance wise, FXI is up 1.8% today but down 0.5% in the past 5 days. FXI has risen by 3.6% year todate but is down 16% in 2023.
According to Tipranks, the average Target price for FXI is USD 28.93 with a Buy rating, a upside potential of 20%.
I am a long term investor of FXI as I believe that it has lots of upside potential. China is the world's second largest economy with 1.4 billion people. To me, a well diversified portfolio is not quite complete without investingin China.
The best part of FXI is the low cost, value for money entry price and the nice regular distributions every 6 months while waiting for capital growth.
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