3 ETFs To Capitalize On The China Technology Sector
Chinese stocks have been in rally mode over the last five months, and technology companies in particular have showed signs of strong momentum.
This sector is dominated by Internet and computer stocks that are leveraging China's robust workforce to create cutting-edge products for billions of worldwide consumers.
One of the best ways to leverage this technology theme is through an exchange-traded fund that gives a diversified and liquid exposure to a variety of industries. Fortunately, there are three strong candidates in this field that offer unique index characteristics.
The Guggenheim China Technology ETF (NYSE: CQQQ) is the oldest ETF in this space, having debuted in 2009. This fund invests in 61 technology-related companies based in mainland China and Hong Kong. Top holdings include well-known brands such as Tencent Holdings and Baidu.
So far this year, CQQQ has gained 10.6 percent amid resurgence in confidence of the Chinese economy.
The KraneShares CSI China Internet ETF (NASDAQ: KWEB) is a relatively new offering that debuted last year and has amassed more than $95 million in total assets based on its strong track record. This ETF focuses exclusively on 43 Internet companies based in China and charges an expense ratio of 0.68 percent.
KWEB has gained more than 20 percent so far in 2014 and 54 percent over the last 52 weeks. While this ETF can experience spurts of volatility, it has continued to draw new assets amid increased trading volume since the beginning of the year.
Lastly, the Global X NASDAQ China Technology ETF (NASDAQ: QQQC) is another alternative that invests in a more concentrated portfolio of 34 tech-savvy companies. This ETF is based on the NASDAQ OMX China Technology Index, which carries many of the same top holdings as the Guggenheim ETF.
QQQC has $23 million in total assets, charges an expense ratio of 0.65 percent, and has gained more than 13 percent so far this year.
The companies within all three of these ETFs are poised to capitalize on China’s mega population and continued demand for innovative new technology.
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