Tensions Between Google And China Bode Well For These China Technology ETFs

“With tensions coming to a boil in the dispute between Google (GOOG) and China, ETF investors may find a China Technology ETF to be a good way to play the domestic firms that will benefit in the absence of the search giant. This week, the battle between Google and China escalated to a new level. Although it was previously rhetorical, the search giant took action on Monday in an attempt to override the Chinese government’s ability to censor its search results,” Don Dion Reports From The Street.    

Dion goes on to say, “Web surfers looking to search Google’s China homepage, Google.cn, were forwarded to the uncensored Hong Kong landing page, Google.com.hk . By Tuesday, however, the government managed to continue to block China’s 390 million Internet users from searching controversial topics such as Tiananmen Square. In light of Google’s action, a number of the company’s partners, including telecom giants, are mulling the possibility of pulling out of their respective deals with the search giant. Even Hong Kong billionaire, Li Ka-shing, has gotten involved in the dispute, dropping Google as the main search engine for his Tom Online Website.”   

“Given the excitement surrounding these Internet companies, now may be an ideal time for investors to pay attention to the dominant China tech ETF on the market. Currently, there are two Chinese technology ETFs: the Claymore/AlphaShares China Technology ETF (CQQQ) and the GlobalX China Technology ETF (CHIB). Although both provide ample exposure to a broad array of tech firms including Baidu and Sohu, their performance throughout 2010 has diverged considerably. Investors holding GlobalX’s CHIB fund have seen considerable underperformance. Year to date through March 23, CHIB has gained 2% while CQQQ has gained 6%,” Dion Reports.    

Google and China may eventually resolve their issues which could change things rather quickly. Otherwise, these China technology ETFs provide a great way to play the trend although investors should be aware that these ETFs are thinly traded.  We have put together some details on the two ETFs including the stocks that make up these ETFs below:    

The investment (CQQQ) seeks to replicate, net of expenses, the AlphaShares China Technology Index. The fund will invest at least 80% of assets in common stock, ADRs, ADSs, GDRs and IDRs that comprise the index. The index is designed to measure the performance of publicly-traded companies which are based in mainland China, Hong Kong or Macau, are in the information technology sector (as defined by GICS) and are open to foreign investment. The fund is nondiversified.

The investment (CHIB) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S-BOX China Technology index. The fund normally invests at least 80% of total assets in the securities of the index and in depositary receipts based on the securities in the index. It may also invest up to 20% of assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in stocks not included in the index. The fund is nondiversified.    

Data as of 3/24/2010

Price ($) Shares
Held Market Value ($)    

Related posts:

1. Global X China Technology ETF (CHIB) Added to Family of China Sector ETFs
2. Claymore China Technology ETF (CQQQ) To Begin Trading Tomorrow December 8th
3. Claymore Files For “Claymore China Technology ETF” (CQQQ)