6 Best Single-Country ETF Plays Of 2013

December 04, 2013

1. The PowerShares Golden Dragon China (PGJ | B-25) is up 57.7 percent year-to-date.

PGJ is a broad-based China ETF, but its stellar performance so far in 2013 speaks more to China’s booming tech sector than to economic growth for the world’s second-biggest economy.

That’s because PGJ allocates heavily to technology names. To put a finer point on the fund’s tech tilt, PGJ holds China N-shares, U.S.-listed Chinese firms that frequently are tech-focused.

More specifically, it's loaded up with Internet-centered names, which face restrictions at home on foreign investment. In all, this hot sector makes up seven of the fund’s top 10 holdings, and tech firms as a whole make up close to 50 percent of its weighting.

“It’s important to understand that the Chinese ‘technology’ sector is still very nascent and largely consists of highly volatile Chinese Internet firms listed in the United States,” IndexUniverse’s ETF analyst Dennis Hudachek said in a recent blog.

“It’s also worth pointing out that the Chinese Internet sector has been red-hot in recent months for a few reasons, including the hype surrounding the upcoming initial public offering of one of the largest Internet behemoths on the planet, Alibaba,” Hudachek said.

Charts courtesy of Stockcharts.com

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