Keith RichardsBMO CHINA EQUITY INDEX ETFZCH.TOPAST TOP PICKDec 19, 2014

Done well since bottoming in April, though sideways between $20-24 lately. China has continued to perform well. So far so good.

(Note the short timeframe.)  Big selloff in world markets in March. Since then, working its way higher. Chart shows a broad-based global advance.

International markets have done extremely well on a relative basis. The Chinese market had been quite depressed for quite some time, now finally started to break out. Very strong in last month or so. This ETF ranks highly in his scoring, looks amazing on the breakout. Capital is moving into Europe and China. 

What interests him is that despite all the tariff talk, this ETF is doing incredibly well. Intriguing that Trump is issuing all these threats, yet this ETF is breaking out.

(Note the short timeframe.) He's being patient, but exercising discipline. If it doesn't hold above where he wants, he'll be out. Chinese tech sector is way cheaper than the American side. Only a 2% position for him, waiting to see what happens.

Everybody hated China because of real estate problems. Chinese government tends to step in and fix problems, and that's what they've been doing. He tried to buy off the floor, resistance around $17. Lots of faith that it'll get to at least that level, and maybe more.

He's long-term on this ETF. There is defined support at $14, so if you buy at $14, you're okay. But be patient. If it breaks below that support, he will get it.

He bought it at the bottom. Per his normal strategy, he will sell at the top of its trading range. China was feared/disliked as an investment, which became a traded trade, and that's when he bought. Inevitably, sentiment reverses.

Risks include geopolitical risk in China.
Broad exposure to China risky but carries opportunity.
Believes a good way to play a China re-opening.

ZCH is more focused on the tech names with BABA counting for 22% of the holdings. There is virtually no financials. XCH has about 20% banks. Must understand what you own. Internet names have been pounded recently. KWEB could be a good way to play it.