Chris Aylott: Is China’s economy slowing down too fast? Is India in a slump? It’s so easy to find weak points in emerging markets that it’s sometimes hard to remember that these are vibrant, growing economies. But the growth is there, and the lightly-traded First Trust ISE Chindia Index ETF (NYSEArca:FNI) may benefit from it in 2012.
The ISE Chindia Index is a non-market capitalization weighted index of 50 Chinese or Indian companies with shares or ADRs listed on U.S. exchanges. Stocks must meet market capitalization and liquidity standards to be included, and they are weighted based on market cap and three month average daily dollar volume.
It’s a selection process that leans towards the movers and shakers of the Chinese and Indian economies. FNI’s Top 10 holdings list as of January 5 includes China Mobile (NYSE:CHL), Baidu (NASDAQ:BIDU), HDFC (NYSE:HDB), Infosys (NASDAQ:INFY), Petrochina (NYSE:PTR) and Tata Motors (NYSE:TTM).
Since launching in 2007, FNI has spent most of its time trading between $18 and $30 per share. It slumped in late 2011, bottoming out at $17.68 on December 19. Since then, it has been on a steady climb, and is currently trading at about $22 per share.
Blackrock chief investment officer Bob Doll has predicted that China and India will be responsible for over half of the world’s growth in 2012. FNI may prove to be a good way to take advantage of it.
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