Exchange Trust Fund – Xinhua 25

ETF (Exchange Trust Fund) provide cheaper way in terms of cost for those who want to invest into stock market. ETF normally having lower management fee compare to Unit Trust. CIMB Xinhua 25 is one of the ETF provide an opportunity for investors who want to invest HK Stock Market, from Bursa Malaysia without bothering about currency exchange rate and reduce risk of invest into single stock in Hong Kong.

As per the name, Xinhua China 25, involve direct holding of 25 large company in China. I do not know why they choose 25 but not 23 or 28. Though the name is China, but it's more mirror to HK Stock Index, as per past record show it's more sensitive to Hang Seng Index's movement.

There are many reasons people invest into China/ Hong Kong. I think the main reason for you to invest into it, should be you believe China / Hong Kong stock market going to be in up trend for next 3 years. Why choose CIMB Xinhua 25? The answer is because CIMB provide market maker together with other 2 broker, hence the share is quite liquidate, do not need to worry if there's no buyer or seller. Beside, they will distribute all the dividend receive from these 25 companies to unit holders after deducting their cost on yearly basis.

Who should invest in this ETF? My opinion, if you have lump sum of money, with planing to invest into Hong Kong stock. Second, you don't want to check the price every day, instead, feel once a week is good enough. Last, you want to practice the method of cost averaging and eliminate the risk of invest into single problematic company.

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