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Pick these Chinese stocks amid volatility: Expert

How to play China after a volatile week

Investors looking to make money in volatile Chinese stocks can still find big opportunities in equities listed outside of mainland China, the manager of a fund composed of Chinese stocks said Monday.

Concerns about China's economy have fueled a wild up-and-down year for the country's stocks. After a multi-week dip, the Shanghai Composite jumped 6 percent last week before adding another 2 percent Monday.

A panel outside a bank displays the morning trading of CSI300 index, the largest listed companies in Shanghai and Shenzhen, and the Shanghai Composite Index, in Hong Kong, China, on July 9, 2015.
Bobby Yip | Reuters

Business conditions in China still look "slow," noted Jim Oberweis, portfolio manager of the Oberweis China Opportunities Fund. But he contended that many H-Shares, or stocks of companies incorporated in China listed in Hong Kong or elsewhere, are still cheap and accessible despite lingering issues in the Chinese economy.

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"When they get beaten down for reasons that don't really even correlate with China, it makes a lot of sense to buy a position there," Oberweis said.

He pointed specifically to U.S.-listed shares of iKang Healthcare, which contracts with companies to provide annual physical examinations. The stock is up nearly 12 percent this year.

Oberweis also likes Hong Kong-listed shares of textile maker Shenzhou International, which have spiked nearly 50 percent this year. Among other Chinese companies, he recommends Car Inc and Tarena International.

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Oberweis' fund has fallen 13 percent in the last month but is up 5 percent for the year.