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  • Why Analysts Prefer The China Technology ETFs? 0 comments
    May 6, 2013 8:00 AM

    Global X China technology is again making rounds as the global sentiment towards technology as an asset class has improved. However unlike the Indian Tech Industry, investing in China Technology funds must not rely on the software exports but on the retail sales of the latest digital gadgetry for which country is the largest producer and also the biggest consumer in the world.

    The nation has more than 500 million internet users but the usage penetration is only close to 41% among the population.

    China's technology sector along with infrastructure and realty is displaying good growth prospects. This country is the largest market for internet and mobile phones and the local companies have and will further also experience enough value addition which clearly indicates that there is still a lot of steam left in the Chinese consumer band wagon when viewed from a long term perspective.

    China is considered and for all the right reasons as the high economic growth region globally.It shares good trade relations with some of the most developed nations of the world. China's large population converts in a huge market for consumption and spending. Its urban population is on the rise due to internal migration and the people are nurturing concepts of quality living.

    Even the students are educating themselves in the link language of the world that is English along with their official language.

    The rising standard of living among the middle class ensures a further increase in the gadgetry sales and this for all the reasons stand out as the best supportive case for investing in China Technology sector.

    A typical China technology ETF will be bound to a NASDAQ benchmark and empowers foreign investors towards a collective and standardised exposure to the industry and adds up the top Sino tech equity of the companies which are actually catering to the billions of Chinese at a ground level.

    Currently there is a large upside potential in the internet users' market. The figures for mobile phone users are almost double of the internet users. China's stimulus efforts have led to a large chunk of sum being allotted to its technological sector.

    Since the 1980's China can boast of a well-developed transportation grid. Also the government promotes the development of its remote regions by offering policies for investment to public including foreigners and even outsiders are permitted to carry out business operations in these interior locations.

    China's growth rate is calculated at close to 8 - 9 % for the time to come. The government in China is more or less a permanent feature and stays in power for almost 10 years. The new leader was elected some months back and the local population waits in anticipation for more strong and beneficial reforms.

    A setback for foreign investors could be that owning a stake in a Chinese company will still not entitle them with any decisive powers as the real ownership lies with the government. As, most large companies are state owned.

    One expert tip reads that investors can play safe by making use of emerging funds distributing their allocations to a number of countries including China, such as JPM emerging markets and Schroder Global emerging markets.

    Alternatively, a pure play exposure such as CHIB ETF may also be considered as the investments can be initiated with lower amounts and the risk attributes along with the operational fees are much lower when you compare China Technology fund to direct investments amid equity markets.

    Global X China Technology ETF [QQQC] yields as per the cumulative returns of the NASDAQ OMX China Technology Index and the twenty six most liquid China tech stocks that the benchmark comprises of. Being a pure play China Technology ETF, Formerly known as CHIB fund, the managers of this fund invest more than 30% in the internet companies of China, which are also among the fastest growing e-commerce companies in the world. The QQQC ETF operates at annual fees of 0.65%.

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