While performance is similar, what's under the hood is not.
A recent Financial Times article highlights efforts from the U.S. and other members of the World Trade Organization's Information Technology Agreement to persuade China to eliminate or curtail tariffs and other measures meant to protect some of China's fledgling IT sectors.
Tech is hot in the U.S., but it's even hotter in China. Three ETFs offer exposure to the red-hot Chinese technology sector:
- Guggenheim China Technology ETF (CQQQ | C-25) holds 60 Chinese tech companies ranging from big names like Tencent and Baidu to lesser-known companies such as TPV Technology—the world's largest manufacturer of computer monitors. CQQQ exhibits decent liquidity that should be adequate for buy-and-hold investors
- KraneShares CSI China Internet ETF (KWEB | C-23) adheres to a narrower mandate, as it targets a subsector of technology: Internet companies. The 25-holding portfolio is heavy on software companies and includes a large dose of small- and micro-cap firms. KWEB's targeted approach is popular with investors: It's the most popular and most China tech ETF and the most liquid.
- Global X Nasdaq China Technology ETF (QQQC | D-18) holds roughly half the number of companies as rival fund CQQQ, but viability is the real concern here. The fund's low asset tally puts it at high risk of closure, while liquidity challenges make the fund difficult to access.
For side-by-side comparison of these three ETFs, check out our China Technology Segment Report.