We told you we think you should play the China-bull market by buying Chinese companies that trade here - but what if you want more? What if you want to buy the whole Chinese market? Or how about owning the markets of countries in the region that will grow with China. There are a number of ETFs, exchange traded funds - that allow you to diversify your exposure to volatile Chinese stocks while still playing the China boom. Which ones should you buy?
The big ones are the iShares FTSE/Xinhua China 25 Index (FXI) and the PowerShares Gld Drg Haltr USX China (PGJ); both are baskets of Chinese stocks explains Dylan Ratigan.
In the FXI, financials, telecom and energy stocks make up the bulk of the basket. By contrast the PGJ has more metals and materials.
Eric Bolling explains the PGJ is a $480 million ETF while the FXI is a $480 billion dollar ETF. He prefers the FXI because he thinks the larger fund will experience less volatility and because there has already been a huge run-up in materials. Eric Adds Chinese financials have just ripped.
Jeff Macke agrees the size of the FXI makes it less risky.
Guy Adami adds it’s important to know the components of these ETF’s before you get involved.
Pete Najarian says if investors are worried that China’s economy is overheating, they should consider the Vanguard Pacific ETF (VPL) because it gives investors exposure to China as well as other countries in Asia.
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Trader disclosure: On May 22, 2007 (the day this show was taped), the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (SWY); Najarian Owns (MDT), (STI); Bollings Owns Coffee, Sugar, Gold, Silver; Bolling Owns March Natural Gas Futures and Is Short April natural Gas Futures