Mutual Fund Returns Prosper in China
October 03 2007:
Mutual funds investing in Asian and Chinese stocks saw considerably higher returns in Q3 2007 than those investing in United States stocks.
Asian invested (excluding Japan) mutual funds were the single best performing category tracked by Morningstar in Q3 2007, rising by 22 percent on average. During the same quarter, the average world stock fund advanced by less than 3 percent. Meanwhile, the average fund investing in American stocks rose just 1 percent.
In fact, the last few years have witnessed phenomenal gains in China's stock markets.
As we have discussed elsewhere, there are three classes of Chinese shares:
* A shares, to which foreign investors have very limited access.
* B shares, which are tradeable by everyone.
* H shares, which are traded in Hong Kong.
Looking at the mainland, the FTSE/Xingu China A50 Index, which follows the top 50 A shares, has risen by133 percent this year. The broader market has done even better. The Dow Jones China Broad Market Index, which tracks 95% of Chinese A shares, is up 177 percent.