As the popularity of emerging markets continues to grow (Emerging Market Choices), ETF provider Claymore Securities recently announced the launch of the newest member of its family, the Claymore China Technology ETF (CQQQ).
CQQQ is unique in that it gives investors the ability to gain direct exposure to technology, a sector expected to grow at an exponential rate in the coming years. The new ETF seeks to track the AlphaShares China Technology Index, which measures the performance of publicly-traded companies based in mainland China, Hong Kong or Macau that are in the information technology sector. The companies that are in the index must have an initial float-adjusted market capitalization of $200 million or greater and $150 million or greater for ongoing inclusion.
Top fund holdings in this new ETF, which carries an expense ratio of 0.70%, include Tencent Holdings, Baidu.com and Nettease.com, and 78% of its assets are allocated to China while 28% are to Hong Kong (What to look for in an ETF). What makes technology in this part of the world so attractive is that capital expenditures by the major players in the sector are expected to increase.
Of the emerging markets, Asia has drawn much attention due to its large growth and V-shaped recovery from the global recession. More specifically, Hong Kong and China have been drawing the most attention (Why India is worth a look as well). As for Hong Kong, the nation has seen GDP growth of more than 3% and has felt a domino effect from China’s growth and popularity. Government stimulus plans, increases in domestic consumption, and favorable trade agreements are several reasons this region continues to grow quickly.
Some other ways to access China and Hong Kong are through the following:
- the Claymore China All-Cap ETF (YAO), which carries an expense ratio of 0.70% and primarily focuses on large cap companies
- the Claymore China Smal-Cap (HAO), which carries an expense ratio of 0.70% and focuses on small cap stocks
- the iShares MSCI Hong Kong Index (EWH), which carries an expense ratio of 0.52% and gives direct exposure to Hong Kong
- the Dow Jones Emerging Markets Composite Titan Index (EEG), which carries an expense ratio of 0.75%, allocates 24% of its index to China and enables one to reap the benefits of other emerging markets as well
