While the world economy was reeling from the effects of a disastrous recession, China has continued to post impressive growth numbers, powered by a massive government spending program and a steady inflow of funds from their banking system. This trend is likely to continue in 2010, as the economy looks to achieve 8% growth once again, after growing 8.7% during the previous year. Investing in a China focused mutual fund is one of the easiest ways to participate in any potential gains from the vibrant Chinese market.
Below we will share with you the 4 top rated China funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all China funds, then click here.
Matthews China (MCHFX) invests the majority of its assets in common and preferred stocks of companies located in China. This includes companies based out of Hong Kong and other Chinese administered regions. It seeks long term capital growth and is a no-load fund.
The fund returned 79% in 2009 and has a ten year annualized return of 16.83%.
AIM China A (AACFX) seeks long-term capital appreciation by investing primarily in equity related securities, such as convertible bonds issued by companies with significant Chinese operations. A smaller proportion of funds are invested in debt, IPOs and cash equivalents. The fund returned over 80% in the last one year period.
This China fund has a minimum initial investment of $1000 and an expense ratio of 1.76% compared to a category average of 1.99%.
Guinness Atkinson China & Hong Kong (ICHKX) invests in companies traded on the Hong Kong and Chinese exchanges. It also purchases securities of companies who derive at least half of their revenues from operations in China. It is non-diversified and invests a large share of its assets in companies included in the Hang Seng Composite index. The fund has a five year annualized return of 15.38% The fund manager is Edmund Harriss and he has managed this China fund since 1998.
Dreyfus Greater China A (DPCAX) seeks capital growth by investing in companies listed on exchanges in Greater China, which includes Hong Kong and Taiwan. It also purchases stocks in firms which have half their assets in China or derive half their revenues form this region. It is non-diversified and may also invest in derivatives, futures, options and forward contracts. The fund has a three year annualized return of 11.27%.
As of December 2009, this China fund held 62 issues, with 4% of its total assets invested in Suntech Power Holdings Co Ltd. ADR.
To view the Zacks Rank and past performance of all China funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/
