Monday, February 19, 2007

China Funds Comparison

In the last article in this blog, we looked at India investments through four mutual funds. In this section we will look at China mutual funds and compare it to the Shanghai Composite Index. Comparisons of the like are helpful to identify the asset classes that one can invest in with fair degree of confidence.

Some of the China funds of interest are noted below:

CHUSX Alger China-US Growth
DPCAX Dreyfus Premier Greater China
EVCGX Eaton Vance Greater China
FHKCX Fidelity Greater China
GCHAX Alliance Bernstein Greater China
GOPAX Gartmore China Opportunities
ICHKX Guinness Atkinson China & Hong Kong
MCHFX Mathews China Fund
NGCAX Columbia Greater China
OBCHX Oberweiss China Opportunities
TCWAX Templeton China World
USCOX US Global Investors China Region Opportunity

While we are not going to look at the expenses of individual funds, we will look at the performance of each fund compared to the Shanghai Composite Index.

The first chart below compares the Shanghai Composite to the first six funds noted above.

Chart1 Shanghai Composite vs First six funds

The first chart clearly shows the Shanghai composite outperforming the funds by about 80%.

Chart2 Shanghai Composite vs the last six funds

Again, all the managed funds lagged the index significantly. OBCHX was the best of the bunch trailing the index by 70%.

Next we compare the Shanghai Composite Index to FXI and PGJ. The comparison charts are noted below.

Chart3 Shanghai Composite vs FXI and PGJ

Both FXI and PGJ havent performed as well as OBCHX. FXI has done better than PGJ but lags behind OBCHX.

The main thing to note here is past performance is no guarantee of future performance. The charts presented in this blog present the funds for the past one year without looking at the focus of each fund in detail. As such, one has to look at the long term prospects, the current holdings and the expense ratio before making an investment decision.

I would also advice the readers to check the disclaimer at the very end of this blog before considering investmenting.

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