This post is part of a special report, Global advisors look to China.
"SPDR S&P China (NYSE: GXC) is our favorite ETF among more speculative contrarian ideas," fund expert Mark Salzinger.
In The Investor's ETF Report, he explains, "Worries over China's economic growth in the face of global recession savaged Chinese stocks in 2008; GXC fell 48.8% from admittedly stratospheric valuations. Now, though, GXC trades at a price/earnings ratio of only 10.7.
"This level is especially compelling considering that real GDPin China is expected to increase in 2009 and 2010, even against a backdrop of slow (or no) global economic growth.
"The Chinese government plans stimulus spending of about $580 billion. Even now, Chinese exports, despite far higher numbers trumpeted in headlines, actually account for only 7% of GDP, according to UBS, so priming the domestic Chinese pump could have a big impact.
"Plus, China will benefit smartly from lower prices for energy and industrial commodities, of which it is a huge net importer.
"GXC offers exposure to all of the major Chinese financial, industrial and telecom companies, but its 118-stock portfolio also provides exposure to smaller companies whose operations are more focused on domestic economic factors.
"It is also likely that China's sustained economic strength will help the Chinese yuan appreciate against the dollar, providing a slight foreign-exchange tailwind to GXC's returns."
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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