Seeking China’s ‘Wave of the Future’ with this Fund

seeking-chinas-wave-of-the-future

by: Doug Fabian

Technology stocks, often considered the “wave of the future,” can provide relatively strong growth prospects because the industry evolves at a faster rate than many others. One exchange-traded fund (ETF) that combines the promise of technology with the high-growth emerging market of China is the Guggenheim China Technology ETF (CQQQ).

This fund invests in technology companies based in mainland China, with allowances made for Hong Kong and Macau-based companies if most of their revenues come from China, Hong Kong and Macau. Market capitalization is a factor for index inclusion here, with a requirement of $200 million being the threshold for initial inclusion in the fund.

As a result, CQQQ’s top holdings are some of the biggest names in Chinese technology, and nearly 60% of the assets are invested in Hong Kong-based companies.

cqqq

Over the last year, this fund has increased in value by 8.3%, not quite living up to the 12% return posted by the S&P 500 in that time. It pays a 1.66% yield and has an expense ratio of 0.70%.

The fund’s total assets are about $47 million. This means that it is below my recommended threshold for investment, but its strategy is one that is worth bringing to your attention. And 2017 could be a very different year for international and emerging stocks than what we saw in 2016.

The top five holdings for this fund are Tencent Holdings, 10.15%; Alibaba Group, 8.83%; Baidu Inc., 8.02%; NetEase Inc., 6.94%; and Semiconductor Manufacturing, 4.79%. The fund’s assets are concentrated in its top holdings because of its market-cap weighting. All told, there are about 75 positions in the fund at any given time.

If investing in a double-whammy of growth possibilities appeals to you, Guggenheim China Technology ETF (CQQQ) could be a good place to start your research.

Exclusive  How Tech Stocks Surged to All-Time Highs

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Like This Article?
Now Get Doug's FREE Special Report:
The New Gold Rush of 2016-2017

With gold already up 20% in 2016, one of the best market timers in the business sees even bigger things ahead. His free special report will show you how to play the coming “gold rush” for serious profits.

Get Access to the Report, 100% FREE


img
previous article

Even with intense volatility and fickle boom-and-bust cycles, technology investing has been incredibly profitable for long-term investors. The industry is unique in that it avails itself liberally to Wall Street, Main Street and corporate America alike. Despite the lingering wariness caused by the dot-com bust of the 2000s even for seasoned investors, outsized returns from the Information Technology sector in the last few years have whetted the appetites of many.

Related Posts

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen publishes 4 different investment newsletter advisories, including the award-winning Forecasts & Strategies, which has beaten the market over the last 15 years.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays. Bryan's four newsletter and trading services include:

Product Details

LEARN MORE HERE

Nicholas Vardy

A Stanford and Harvard Law graduate, Nicholas Vardy scours over 40 different global markets every day to uncover new profit opportunities for subscribers. His 3 advisories and trading services include:

Product Details

LEARN MORE HERE

Doug Fabian

A 30-year Wall Street veteran and famed market timer, Doug Fabian is one the nation's foremost experts on ETFs (Exchange Traded Funds).

Product Details

LEARN MORE HERE

Bob Carlson

In Bob's monthly newsletter, Retirement Watch, he provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE