China to the Rescue
Will China lead the recovery? Chinese stocks had their highest close in nearly 11 months led by coal and financial shares as optimism grew for prospects for economic recovery. In its latest report, the World Bank has raised its forecast for economic growth this year to 7.2% from 6.5% projected in March. However, this is below the official target of 8%t.
The Chinese stock exchange has surpassed the Tokyo exchange, making it the third largest in the world, after New York and London. U.S. investors may participate the the China A-share or mainland market through the Morgan Stanley China A Share Fund (CAF) and iShares FTSE/Xinhua A50 China Tracker (IFXAF.PK) (or 2823.HK).
CAF is actively managed and invests directly in Chinese A-shares with its allocated QFII (Qualified Foreign Institutional Investor) quota. Its fund manager endeavors to pick stocks that will beat the index. On the other hand, IFXAF is a passive index fund tracking the performance of the FTSE/Xinhua China A50 Index.