Go!
If a fund has "China" somewhere in the name, odds are good that it has screamed to the top of the charts. For example, which of these ETFs has posted annualized gains of +17.4% over the last decade--enough to quintuple a $20,000 investment into nearly $100,000?

A.)  iShares FTSE/ Xinhua 25 (FXI)
B.)  Claymore/Alpha Shares China Real Estate (TAO)
C.)  iShares FTSE Hong Kong Listed China Index Fund (FCHI)
D.)  WisdomTree Dreyfus Chinese Yuan Fund (CYB)
E.)  Templeton Dragon (TDF)

Published: May 5, 2009

The correct answer is      (E.) Templeton Dragon (TDF)

Dr. Mark Mobius, a protégé of the legendary Sir John Templeton, has been a foreign investing specialist for over 40 years. In that time, he has received some impressive accolades, notching "Closed-End Fund Manager of the Year" awards from both Morningstar and CNBC. According to Reuters, Mobius ran the No. 1 emerging markets fund in the country in 1998. Also, Carlson Group named him one of the Top-10 money managers of the 20th century.

You don't take home that type of hardware by accident, and Mobius also has a staff of two dozen talented emerging-markets analysts at his disposal. Together, the team scours the Chinese market for companies that are undervalued relative to long-term earnings potential -- evaluating competitive position, raw material costs, profit margins, government regulation and a host of other factors.

That research has led to a hand-picked portfolio of about 70 stocks representing a broad swath of the Chinese economy, most notably oil and gas, real estate, commercial banking, telecom, utilities and consumer staples. The fund has already posted a gain of +15% in this year's recovery, outpacing the middling returns of most competitors. And TDF has beaten its category peers in seven of the past eight years. Meanwhile, it has topped the broader MSCI EAFE Index just as often -- clocking the benchmark by wide margins of 25% or greater in three of those years.

The economic meltdown may have prices depressed around the globe, but before long, investors will again be drawn to China's inexorable transformation into an economic superpower. And TDS is just one of several China-focused ETFs on the market; fund investors have plenty of ways to participate. That's why StreetAuthority editor Nathan Slaughter has evaluated and ranked China-based ETFs. In the latest issue of the ETF Authority newsletter, Nathan discusses his selection methodology and presents his custom list of seven superstar funds offering access to 'A' shares that would otherwise be off-limits to U.S. investors. As he notes, investors have plenty of options -- but China ETF portfolios vary widely, so be sure to do your homework. To learn the names of Nathan's picks, and to learn more about ETF Authority, please visit this link.

Want to answer more trivia questions? Visit our archives here!


 

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