Additionally, there are 700 million active smart devices in China. In 2013, $300 billion was generated through e-commerce. And China’s Internet economy comprised 4.4% of China’s GDP for 2013.
The growth potential is even more stunning. McKinsey & Co. also reported in 2013 that by 2025, annual online sales could reach $650 billion, up 242% from 2012’s $190 billion.
China’s poised for big growth in both e-commerce and mobile e-commerce. And the best play for this would be Alibaba Group Holding Ltd. (NYSE: BABA). Alibaba stock is a great long-term, buy-and-hold stock. But, it’s down 20.8% in 2015.
This is more an indictment of Wall Street’s short-sightedness than it is of Alibaba. The current Alibaba stock price is a bargain. This is a great entry point. But, it still may be hard for some investors to jump in on such a volatile stock right now. And that’s where KWEB comes in.
Its holdings include Alibaba, at a 7.8% portfolio weight. But it also offers a broader play on the sector. In its portfolio there’s also JD.com, Tencent, and Baidu Inc. (Nasdaq ADR: BIDU). These all represent compelling investments in China’s burgeoning “e-tailing” sector. It’s a safe play that FXI will climb alongside Alibaba – albeit not as explosively. But, it is also diversified away enough from Alibaba so it won’t take as big a hit on the downside.
“The KraneShares fund is the kind of investment folks should look to incrementally add to when they have extra cash or when the price is down – and look to hold for a number of years to maximize profits,” said Money Morning Executive Editor Bill Patalon.
The Bottom Line: China ETFs are emerging market investments, so there’s no question that investing in China will come with some volatility. But in the right allocations, investors can’t go wrong with these solid China ETF picks – even as Western investors look to, mistakenly, head in the other direction.
We’re in the midst of the greatest investing boom in almost 60 years. And rest assured – this boom is not about to end anytime soon. You see, the flattening of the world continues to spawn new markets worth trillions of dollars; new customers that measure in the billions; an insatiable global demand for basic resources that’s growing exponentially; and a technological revolution even in the most distant markets on the planet.And Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come.