'Safe' Dividend Stocks In China

Investing in China is fraught with risk but there are strategies that can help investors avoid getting burned. The bulk of Chinese companies that have been embroiled in recent scandals have been firms that list their shares on exchanges in the United States or Canada though so-called reverse mergers. And while there's no foolproof strategy, Cragg also said that companies with a track record of paying dividends are good bets.

Portfolio managers Bruce Brewington and Jesper Madsen only invest in Chinese companies that pay dividends. They say the strategy allows investors to capture China's robust growth, while providing a buffer against accounting shams. "If companies can pay out dividends, that means they are generating earnings," said Madsen, who manages the Matthews China Dividend Fund. The fund's top holding is China Mobile, which pays a 4.2% annual dividend.

Source: KTVU.com

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