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China stock boom

Rather than ch a s i ng quic k ga i ns in f lashy

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booms. Rather than ch a s i ng quic k ga i ns in f lashy stocks , investors would be better off d e lving deepe r into U nderstandingtheforcesdriving the nation's econom y, saysL a n X ue , C i t i group ' s head of C h ina research . In her view ,t he k eyfactoriS the ~x-
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who has a solid repu- LIVING LARGE tation, has sought out Middle-class a broad selection of spenders are ChiJlese large-cap and drivillgChina's . sDl a ll-c ~ ps t ocks ~d . g . .owth. . . l ends to stray from the. obvious . ... . The Guinness Atkin- son China and Hong . Kong fund (ICHKX)is ·· another strong choice. Conservative as China- oriented funds go , this one s tr ikes a balance . . . between Hong Kong large caps and state- ()\\ 1 lled Dl ain}an d pow- .. i erp1<l.yslik~the f r esh ba J1 k I PQs , It h a s ) gamed nearly 15% ail ~ Dua l ly over j: he past · · five year sc . . . InvestorssboUIdalso . . •. . . f Onside r ~hethree e~- . change-traded fllnds th.a t focus ( )!1 · China . ETFs, which are traded like - stocks, offer low costs a nd are des i gned to track spec i f i c i nde x es. The iShares FTSEXinhualndeX ' (FXI} covers25 ( )f the largestcolIlpanies listed i n Hong Kong, a selection that ensures liq- uidity but means any volatil i ty in those top holdings . (60% of the in" . dex is in the top ten stocks) will be magnified. It's up 27% overthe p a s t - 12mmiths. TheiShares MSCIHong . Kong index (EWH) coveTS the broader · Hong K()ug indexwithanempi :J .asis on te l ecom and · fi- nance , and retu r ned 6% in · the past y ear. A n d finally , the Power- Shares Golden Dragon (PGJ) covers 57 com- panies listed onAmerican exchanges . that derive the majority o f thei r rev- enue from China-from Internet company Baidu to oil company CNOOC-and · has gained 12% since September 2005. That beats the S&P,but place your o r ders ca r e- fully.Even with these more conser- vative-options,when you grab on to - the tail of the Chinest<dragon, you have to hang on t igh t . II . . - - - , " . ' ,' -- . - . . . . ' .. '. " : '. : : ~ - : ', ' " , -: -, - - -: - - -- : - : ', . , ponential r ise o f the count r Y's mid- ~ d soo ri er or laterprofit margins dIeClass,which is giving c onsumers \ v i ll be erod e d. " . . the money t o b I JyeverytlriJlgfrOmin- '. '. BuyiIl~indiv i dual Chinese stocks sutance to ice cream with a ven-has gotteneasier > Twenty-twocom- geance . "The most signifiCantdevel- paniesonthe Chiila 100 are listed opment is . a purcha.siilg~power onAillerican excha.nges,vs.l~ the . increase," she says,pointing to mar-year bef6n::.Butthat doesl l 't mean . ket leaders like China Mobile,iil- it's wise. "It ' s atypical emerging surance company China Life , a rid marke t , »
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