Is it too late to join the boom in China?
What are the chances that one of your funds will return 100% this year? Extremely slim. Few funds rise 50%, let alone double in a 12-month period. But during the year ending in September 2007, 11 funds investing in
Winners included Aim
Should you avoid funds with big Chinese stakes? Not necessarily. Even though many Chinese stocks are expensive, with price-earnings ratios of 30 or over, corporate earnings continue to soar. Analysts expect the economy to expand 10% annually for the next several years. Thus, some companies justify their high prices.
Still, investors should proceed with caution. Mark Headley, portfolio manager of Matthews China, says that Chinese markets have long been volatile, sometimes recording relatively sudden downturns of more than 30%. “If you're excited about
Investors could start with a diversified international fund, such as Thornburg International Value, which has 3.3% of its assets in
For a riskier but potentially more rewarding taste of
To hold down risk, he rarely puts more than 2% of assets in any one stock. He is bullish on the outlook for companies serving the domestic market, such as Industrial & Commercial Bank of