This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"My top investment recommendation for 2009 is the SPDR S&P China ETF (NYSE: GXC)," says Mark Salzinger, exchange-traded fund expert and editor of The Investor's ETF Report.
"I recognize that this is an aggressive, risky choice. However, the Chinese economy boasts some impressive strengths, and, after falling by at least half in 2008, Chinese stocks are trading at very low valuations.
"China has approximately $2 trillion in U.S. dollar reserves, which it can use to buttress economic and political stability in the country. Also, even with a much reduced economic growth rate in 2009, China still will be a huge importer of oil and many industrial commodities.
"That means China will benefit greatly from lower prices for these products, some of which have lost two-thirds of their value just since May 2008.
"Compared to its main competitor, the Ishares FTSE/Xinhua China 25 Index ETF (NYSE: FXI), the SPDR S&P China has a lower expense ratio (only 0.60%, vs. 0.74% for FXI) and a much broader portfolio (126 holdings, vs. 25).
"Financial-services stocks account for a lower percentage of the SPDR's assets, while technology and consumer stocks account for higher percentages.
"This probably makes the SPDR S&P China more sensitive than FXI to Chinese domestic demand, rendering my recommendation more attractive during a period in which China's own economy is likely to do better than that of the world at large."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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