If the “trade war” with China gets resolved, will that be a buying opportunity for China-related investments? My personal opinion is that the risks far outweigh the rewards. However, for those who just have to have a China-related investment, I suggest small investments in a low-cost ETF focused on China.
Buying international investments is prone to be more complicated. For that reason, the investor can expect to pay more for an ETF or mutual fund. For ETF FXI, the expense ratio is 0.74%. That isn’t terrible from a historical perspective, but it is a bit much for the present dividend yield of 2.35%. To make this even more disappointing the 5-Year Total Return for this fund is 27.60%. In other words, just a bit better than 5% per year. Of course, if things boom for China, then this could be a gold mine.
Some mutual funds focused on China are Fidelity’s FHKAX and Matthews China Dividend Fund Investor Class mutual fund (MCDFX). The problem with these mutual funds is both performance over the last five years and high expense ratios. In other words, you pay a lot to own them and then don’t make much money.
If you want to dig deeper, the following link will take you to the U.S. News & World Report “BEST MUTUAL FUNDS.”