What are some good mutual funds which cover the emerging Chinese market?

Question

What would be a good high-yield...mid-level risk... fund which covers some of the biggest growth sectors in China?

Answer 1

Franklin Templeton, and Morgan Stanley are known for having many international and emerging market funds.

there are also a decent number of China-focused closed end funds, which are different from mutual funds b/c the number of units outstanding is fixed.  They often trade at discounts and premia to their net asset value.  they also tend to have high dividend payout ratios, but an emerging market fund probalby won't have high dividends.

Every Monday (or maybe Friday), teh Wall Street Journal, in the Money and Investing section, has a section devoted to Closed End Funds.  Under Specialty Funds, you'll see some with China in the name.   You can research those, and if there's a little clover next to them, you can order the prospectus from teh WSJ for free.    check the MFs too for these.

Answer 2

First of all, since you'll be focusing on a single country (and an unstable one at that), you can forget about "mid-level risk" - all funds focusing on China (or even just on Asia) will have VERY high volatility. Therefore, you should not put more than 10% of your portfolio in such a fund.

That said, there is some good potential there in the long-run. As far as no-load funds, the two best out there are probably Fidelity's China fund (FHKCX), and T. Rowe Price's New Asia fund (PRASX - currently investing just under 50% in China, the rest in other Asian countries).

The good news is that both funds are down considerably YTD, so you'll be getting in much cheaper than you would have in January (there's still plenty of short-term downside risk, though).

I hope that helps. Good luck!