Chinese Equities: Buy or Sell

Big Trouble Little China - Lightning Dude

Chinese stocks are at 10 year lows, is it time to load up?

If you've been following the international markets then you know China is down on its knees.  Its why Mastery wants you to consider the iShares FTSE/Xinhua China 25 Index ETF (FXI) and ProShares UltraSh FTSE/Xinhua China 25 ETF (FXP).

Chinese stocks have fallen back into the abyss and are trading at levels not seen since the world almost ended in 2008.  Now that Chinese securities have sunk to a new bottom, the media is all over it.  Truth be told the party in China could get worse before it gets better.  Depending on which side of the coin you are betting on, your weapons of choice are the FXI and FXP.

We would rather buy into one of the Chinese ETFs than pick up individual stocks.  Why risk it all on one name when you can just buy a basket of stocks. 

THE LONG CHINA ETF
iShares FTSE China 25 Index Fund Index ETF (FXI) is trading at $34.98 and its shares are 18.21% from its 52-week low.

THE SHORT CHINA ETF
ProShares UltraShort FTSE China 25 ETF (FXP) is trading at $24.64 and its shares are 12.46% from its 52-week low.

MASTERY Bottom Line (SUB ZERO Style)

MASTERY Bottom line:

Its not often you get a chance to make a bet on a market that is at a decade low.  Its why we want you to do your own homework and determine if you would like to dabble in 'betting on China'.  Mastery recommends a small position, less than 5% of your portfolio for such a sepculative play.  The payoff could be big if Chinese stocks start to get positive attention, but it could swing the other way.

Right now the FXI and FXP are made up of the following stocks

View all holdings  
Name % of Fund
CHINA MOBILE LTD 0.0984
CHINA CONSTRUCTION BANK-H 0.081
IND & COMM BK OF CHINA-H 0.0766
CNOOC LTD 0.073
BANK OF CHINA LTD-H 0.0584
CHINA TELECOM CORP LTD-H 0.0494
CHINA LIFE INSURANCE CO-H 0.047
CHINA UNICOM HONG KONG LTD 0.0455
CHINA SHENHUA ENERGY CO-H 0.0449
BANK OF COMMUNICATIONS CO-H 0.0382
  0.6124