iShares FTSE/Xinhua China 25 Index (ETF) (NYSEARCA:FXI) Struggles To Offer Returns To Investors


Dallas, Texas 10/23/2013 (Financialstrend) – iShares FTSE/Xinhua China 25 Index (ETF) (NYSEARCA:FXI) is a China oriented exchange traded fund. It operates with a motto of investing in select sectors of China and earning returns which are in line with the price and dividend yield appreciation of the bench mark FTSE/Xinhua China 25 Index. The index lines up 25 of China’s largest market capitalized companies with load of liquidity. The exchange traded fund advisor is Barclays Global Fund Advisers.

The fund has paid out dividend of $0.95 per share over the past 12 months. This translates to a 2.49% forward yield. The past 200 day trading average of this ETF is around the 4.89% mark. Over the past 12 months, it has appreciated its market value by 4.89%. In the shorter term it has struggled to return share holder value and meet expectations. It has shed 1.24% of its value in the past 30 days of trading.

The performance of the fund is in direct contrast to the upbeat sentiments that generally surround data coming out of China. This buoyancy in investor confidence is in spite of the relative slowdown that the world’s second largest economy is experiencing in its GDP growth rates.

In a report dated October 22, the price for new homes in China’s top four industrialized provinces has shot up the fastest since 2011. The price jump being experienced is in the range of 20%to 9% putting acute pressure on the communist government to step in with anti inflationary measures in the housing market.

This run away price increase is making a lot of HongKong based analyst start to caution their clients to slow down their investments in the real estate sector since they sense a bubble being fueled thanks to the close to double digit appreciation being seen in real estate. “Home prices, especially in big cities, are a bit out of control,” commented noted economist Liu Li-Gang.

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