China ETFs dominate weekly performance.
The week's (7/21-7/25) list of the hottest ETFs is completely dominated by China after economic data showed better-than-expected results in HSBC's Manufacturing PMI data.
Investors welcomed the fourth-consecutive gain in the index after weakness in the first three months of year startled markets and sparked concerns of a hard-landing slowdown. While each of this week's five hottest ETFs target China, they each take a different approach to the market.
Starting from the bottom, the Market Vectors ChinaAMC A-Share ETF (PEK | F-48) and the db X-trackers Harvest CSI 300 China A-Shares ETF (ASHR | D-52) each target the mainland A-share market by tracking the CSI 300—an index of the 300 largest and most liquid companies traded on the Shanghai or Shenzhen exchanges. Respectively, PEK and ASHR returned 5.4 and 5.6 percent for the week.
The RBS China Trendpilot ETN (TCHI) is a crafty exchange-traded product that toggles between exposure to a China index and three-month Treasury bills depending on whether the index is closing above its 100-day simple moving average. The idea is to provide exposure to Chinese equities on upswings while switching to U.S. Treasurys as momentum subsides. Currently exposed to Chinese equities, TCHI returned 5.9 percent on the week.
Targeting the Chinese Internet sector, the KraneShares CSI China Internet ETF (KWEB | B-20) owns U.S.-listed shares of Chinese Internet companies. A seemingly awkward way to get exposure, KWEB's approach actually makes some sense, as many Chinese Internet companies are listed in the U.S. or Hong Kong. KWEB returned 6.6 percent on the week.
The week's top-performer was the Global X China Financials ETF (CHIX | C-92), which holds a concentrated basket of 40 Chinese financials companies. The fund comes with heavy exposure to China's largest state-owned banks—a play that returned 6.6 percent for the week, as growth strengthened and debt fears resided.