"The Oberweis China Opportunities is taking full advantage of some of China's best investing opportunities. It invests at least 80% of its assets in Chinese securities. The fund generally invests in small and mid-cap companies, and its holdings have an average market cap of about $850 million.

The fund was launched in October 2005. OBCHX then put up impressive numbers in 2006 and 2007 (+81.2%, +59.3%) before succumbing to the 2008 downturn, when it lost -64.3%.

"So far in 2009, OBCHX has gained +61.8%. The fund carries a 2.0% expense ratio and requires a minimum investment of $1,000.

"Based in Hong Kong, manager Vanessa Shiu uses strict guidelines in her selections. One of these guidelines is that a company's stock must have outperformed at least 75% of other stocks in the market over the preceding twelve months.

"Another is that the selections must be experiencing rapid growth in revenue from internal growth. While these criteria, and others, limit Shiu's options, they limit her to the best and fasting growing companies in the region.

"The fund generally pays annual distributions in December of each year. In 2007, the fund made a distribution of $2.04 per share, and it 2008, it paid $2.765 per share.

"The shares of OBCHX are currently trading at a price of $12.78, giving the fund a trailing 12-month yield of 21.6%. The majority of the fund's distributions have historically come from long-term capital gains.

"If the Chinese economy continues to grow as expected, OBCHX will be a clear winner. This is largely due to its stock-selection style, which is much bolder than most other China funds.

"Keep in mind that due to its bias for smaller companies, the fund will continue to be more volatile than other China funds. That said, the company offers great income potential for those who don't mind capital gains and a slightly wilder ride up.

"Matthews China is another mutual fund focused on Chinese stocks. Unlike the Oberweis fund, however, MCHFX focuses on larger companies. The average market cap of its holdings is $6.0 billion.

"The fund was launched in February 1998, and since then has put up excellent numbers. The fund has returned an average of +11.7% annually. Its three-year returns come to +18.4%, and its one-year performance is down -18.0%.

"So far in 2009, MCHFX has gained +37.6% -- outperforming the MSCI China index (and most of its peers) by. The fund carries a 1.3% expense ratio, is no-load, and requires a minimum investment of $2,500.

"MCHFX generally pays distributions in December of each year. In 2008, the fund made a payment of $5.94 per share, predominantly from long-term capital gains. At the current price of $20.02, that gives the fund a trailing 12-month yield of 28.1%.

"The fund experienced a heavy loss of -49% in 2008, but it has already made much of that ground back in 2009. The fund's gain of +37.6% so far this year puts it about five and a half percentage points above the benchmark MSCI China Index.

"The portfolio's discretionary holdings bounced back strongly in recent months on news that the Chinese government's efforts to boost consumer confidence were proving effective.

"With its giant yield and its stellar historical performance, this large-cap fund is well-suited for moderately risk averse investors looking for exposure in China."

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