China’s Silver Bullet

The Lone Ranger did not help Disney but China has ridden in on its white stallion this morning with positive economic data to rescue world equity markets. The country’s exports and imports were both ahead of expectations suggesting the world’s makers and takers are saddling up.  Regular readers may not be surprised as we have been highlighting China funds since they began to score well last month.  Today’s 10 Green Diamond SPDR S&P China Fund (GXC), gets that distinction for the 7^th time since we mentioned it on July 12^th and 4 of those were in the last 5 days.  It has outperformed the market since then and it sounds like the William Tell Overture is just beginning.

Most striking is its stellar 99.5 Fundamental Score saying it is about as cheap as it has ever been since launching in early 2007, all four fundamental sub scores are above 99.  Behavioral is not as strong at 59.7 with technicals a little better than sentiment which is not as bearish as Quant likes to see.  The Geographic Exposure on its ETFG^sm Tearsheet shows 83% in China which we calculate according to the headquarters of the fund’s constituents.  GXC has outperformed China’s struggling Shanghai Index because those constituents are the ones available to foreign investors which are listed in Hong Kong.  This is reflected on the Currency Exposure chart showing 89.4% to the Hong Kong Dollar, so the better performing Hang Seng Index is a more relevant benchmark.  The Sector Exposure shows about a third of its 215 constituents in financials but the other industry and sub industry charts show that sliced thinner among many diverse industries.  Please notice the new tabs at the top of the Tearsheet where we break out performance, fund flows and other important information.  Both of those metrics have shifted from negative to positive in recent periods.

Like yesterday’s FEZ, our models have done an excellent job calling GXC.  It was a top ranker from last August through December when it was leading world markets but dropped out of the top 100 in early January before suffering a 20% correction.  Like much of the world, it bottomed on June 24^th and was back in the top 10 a few days later.  With calls like that, you can consider ETF Global^® to be your Tonto (without the dead bird on our head). Yippie ki-yay Kemo Sabe.