Disclosure: The accuracy of the material found in this article cannot be guaranteed. This was the initial list of best-performing China ETFs that was screened back in November 2020. I don’t see why that might be the case. If you’re looking for a more simplified way to browse and compare ETFs, you may want to visit our ETFdb.com Categories, which categorize every ETF in a single “best fit” category. Last year, the KraneShares CSI China Internet ETF (KWEB), widely viewed as the benchmark exchange-traded fund (ETF) focusing on Chinese internet stocks, returned a … I highlighted which were the best China ETFs at that juncture in terms of YTD 2020 performances, Morningstar Rating, Lowest Expense Ratio, Largest Net Asset, and Best Overall. However, keep in mind that Baidu’s 4Q2020 cloud revenues annualized US$2 billion with 67% year-on-year growth. The EWT ETF is suitable for those looking at stability vs. some of the more volatile China ETFs in this list. In the below table, we compare the Lion-OCBC Securities TECH ETF against the iShares Hang Seng TECH ETF. One of the new fintech brokers that is bringing low-cost commission trading in Singapore to a whole new level. You can purchase ETFs just like you buy a company stock. The Top 5 holdings of this ETF is NIO Inc ADR encompassing approx. Investors can select to invest passively and regularly into these portfolios to gain exposure into the China market. I agree that earnings translation risk is something that is not evident but yet should also be taken into consideration. Required fields are marked *. There are nuances to index construction methodology, and the understanding of what constitutes “tech” might differ across various index compilers. They do however have relatively high expense ratios > 0.60%. The index is a free float-adjusted market capitalization-weighted index designed to measure the performance of equity securities in the top 85% in market capitalization of the Chinese equity securities markets, as represented by the H-shares and B-shares markets. Once again, all very useful information. Notify me of follow-up comments by email. The former is how much you earn, and the latter is how much cash you actually get. Similar to Waymo (Google’s autonomous driving unit), Baidu also has an autonomous driving unit called Apollo, which leads China’s automous driving space. At its current share price, we do not think that Nanofilm is a compelling investment. We believe that Baidu warrants a closer look. Personally, we will be taking a closer look at Baidu for several reasons: Visible short-term growth: Cloud computing exposure. Internet has become closely integrated with the everyday life of Chinese people, and some companies are positioned to profit greatly from it. The KraneShares ETF focuses solely on China, offering access to … The fund is benchmarked against the FTSE China Index and is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-Shares, B-shares, and A-Shares. KWEB: While its YTD performance might have been a disappointing -3.2%, this might be the pure-play ETF if you believe in the rebound of the China-tech industry as most of its holdings are China-tech stocks. SPDR Portfolio Emerging Markets ETF. An All-in-one Fundamental Stock Screener that EVERY serious investors should have in their investing arsenal. 30% off Premium Plus membership for its Black Friday Sale. The fund generally will invest at least 90% of its assets in the component securities of the underlying index and in investments that have economic characteristics that are substantially identical to the component securities of the underlying index. For Our Singapore Readers, What Withholding Tax Rates Apply to You? The iShares MSCI China ETF (MCHI) is the largest China ETF by net asset in this list, with a total net asset value of US$6.2bn. The Guggenheim China Technology ETF (NYSEARCA:CQQQ) is a popular exchange traded fund that invests in the companies from the tech sector in the Asia-Pacific. Buying into China stocks is never a walk in the part as seen from recent events. For example, many consider Alibaba to be one of China’s largest Tech companies and an investor might be keen to get exposure to it…but did you know Alibaba is NOT held by a number of China Tech ETFs, such as the widely used Invesco China Technology ETF (CQQQ US), or the Global X MSCI China Information Technology ETF (CHIK US)? Best Stock Brokerage in Singapore [Update April 2021]. The outperformance so far in 2021 vs. some of its peers is due to the counter’s massive stake in Alibaba, with a combined portfolio composition of >22% across both Alibaba’s US and HK-listed entities. Have a good rest, folks! I would personally avoid 3186 for now since: 1) Mkt cap is still very low at US$10M. While you're at it, remember to check out our latest articles. Yes, 3186 would be marginally better than KWEB from a withholding tax perspective but the actual savings isn’t much at less than 0.1% p.a, since KWEB only has a dividend yield of 0.3%. Hi Sinkie, thanks for dropping by again. For those who do not wish to purchase these China ETFs directly through your brokerage firm, you might want to consider doing it through a Robo Advisor such as through Syfe. iShares China Large-Cap ETF (ticker: FXI) If you're looking for an easy way to invest in this hot emerging market, FXI is a popular choice. In this article, we shortlisted 4 ETFs we deem optimal for investing into the sector, and revealed the China Tech stocks with the highest implied upside to analyst consensus target prices. Syfe Equity100 review: Does this portfolio make sense to you? [FREE GUIDE] Quick Start Videos: Getting started on Inv... What exactly is a Poor Man’s Covered Call? This gives us a better idea of whether the ETF is bias towards “software”, “hardware” or a blend of both. However, it has one of the highest expense ratios in this list at 0.79%. The good news is that Singapore investors are now given another option if they wish to buy into this Tech Index. Which S-REITs hav... Top 5 resilient SG stocks to buy amid COVID [2020], Top 5 Undervalued SG dividend stocks [2020], Best ETFs in SG to structure your passive portfolio, Top 4 stocks with high recurring revenue [2020], Video Guide: Getting started on Investing in 2021, Ultimate Guide to investing using SRS account, Ultimate Guide to Stock Brokerage in Singapore, Best China ETFs based on Performance, Morningstar Rating and Expense Ratios, Best China ETFs: Highest Morningstar Rated, Best China ETFs: Lowest expense ratio (with > 20% YTD returns), Step 1: Find a China ETF that is suitable for you, Step 3(b): Getting an indirect exposure through a Robo-advisor, Other benefits of buying the SGX-listed ETF, US is looking to ban tech exports to 89 Chinese firms, comprehensive list of stockbrokers here in Singapore, Motley Fool review: Getting multi-bagger ideas the easy way, Hang Seng Tech Index: A deep dive into the hottest tech stocks of Asia, Best Stock Brokerage in Singapore [Update 2021]. Our 4 shortlisted China Tech ETFs are… Invesco China Technology ETF (CQQQ US) Global X MSCI China Information Technology ETF (CHIK US) KraneShares CSI China Internet ETF (KWEB US) iShares Hang Seng TECH ETF (3067 HK) For both, you need a brokerage account to buy and sell shares. Tencent Holdings Ltd., Alibaba Group Holdings Ltd. and China Mobile Ltd. are top holdings. Both these ETFs are also rated highly by Morningstar, with a below-average expense ratio of 0.19% and 0.59% respectively. The best performing China ETF is KranShares MSCI China Environment Index ETF (KGRN), with a YTD return of 116.5%. * Assets and Average Volume as of 2021-05-07 … China-based companies head the ETF roster with 42.39%, followed by Australia (26.28%) and the U.S. (15.14%). Alibaba Cloud’s 4Q2020 revenues annualized US$10 billion with 50% year-on-year growth. Despite the higher expense ratio, EWT has a longer track record vs. FLTW, where its 5-year return is a very decent 176%. KraneShares China Internet was an unremarkable ETF until a year ago. You might be surprised at how different they are. Private Equity – Is it an Asset Class Worth Investing in? 1,020. A common gripe among SGD investors is the lack of high growth tech stocks listed on SGX. Do note that the China tech stocks in these lists are not exhaustive. The key difference is that it’s tailored for the Singapore market, and hence offers both a SGD-denominated share class and a USD-denominated share class. By. For a Singaporean investing into the underlying companies of the China tech index, the main FX concern is CNY/SGD, seeing as most of their earnings are from the mainland. For Singaporean investors, I will provide an alternative solution with a brief discussion on the Lion-OCBC Securities Hang Seng Tech ETF. We see this as a consequence of firms starting to prioritize digital transformation, which has accelerated the growth of various tech sub-sectors, as opposed to a tech bubble. potentially synthetic ETF). Moving forward, Baidu plans to expand its Robotaxi services to 30+ cities in 2023, with 3,000 autonomous vehicles. Let’s look at some of the best London-listed Asian ETFs. However, for Singapore investors looking to invest in the ETF, that will mean facing foreign currency risk since the ETF is traded in HK Dollar. Hi, so glad that I found this complete comparison on the China ETF. China tech stocks have been underperforming their US counterparts since late-2020, starting from the dramatic cancellation of Ant IPO, which many believe is due to the direct consequence of Jack Ma “shooting his mouth off” which angered Xi Jinping (China’s president) and that resulted in an abrupt halt in 2020 most anticipated IPO, that is also expected to be the largest-ever. 10.6% of the fund followed by BYD Co at 8.9%, China Conch Venture at 8.3%, China Vanke at 7.1%, and Shimao Group at 6.7%. This fund has a relatively low expense ratio of 0.19% and generated YTD returns of 30%. Manulife US REIT: Potential for more upside. Want Tencent exposure, but pay 28% less? Let’s focus on the first three of those China ETFs, which cover technology and growth areas. Quoting from a report published by JPM on 28 March 2021, “…Baidu’s autonomous driving operation could be worth US$99 billion today if it captures 20% market share in both commercial transportation and intelligent car solution markets (10 years from now)…At a more optimistic net margin assumption of 30%, Baidu’s autonomous driving solution could be worth US$200 billion today.”. Its YTD performance is 27%. These factors may help to provide some support, in the event of further share price declines across the broader China tech sector. Do you know that you have to pay additional fees when buying US ETF in Singapore? If not you can jump to the price performances of these ETFs as of Nov 2020 vs. May 2021. This is an updated article that was first published back in November 2020. For example, Baidu’s HK-listed closed at HK$210.60 today, and its ADR (which represents 8 shares of Baidu) opened at US$216.21 in the US market. One can further analyze the performances of the above ETFs using the Stock Rover platform. Updated May 6, 2021. While the former has a slightly higher total expense ratio, it would still make sense for investors who: Investing is very personal, so we believe that the best ETF to invest in would depend on one’s personal situation and investment preference. China Tech stocks have done phenomenally well since March 2020. At the margin, we see some of the key risks receding, and this may catalyze stock price consolidation for the sector. The typical expense ratio is in the region of 0.6-0.7%. HST is not SGD-hedged, so will also have currency risk for a Singapore investor. I really believe in China to be the next superpower dominant economy in the next 5-10years. Investing in China Tech stocks via ETFs can be relatively complex. CHIQ is rated 4 stars while KWEB is rated 3 stars by Morningstar rating agency. Tiger Brokers review: Possibly the cheapest brokerage in town. During the blow-up, there was a forced liquidation of Archegos’ portfolio holdings, which included significant exposures in Baidu, Tencent Music, Vipshop and iQIYI. I have highlighted some of the Best China ETFs to consider buying for the long term. We have also included how much these ETFs have declined in price (highlighted in orange), from their respective peaks in February 2021. Here are some of the Best China ETFs to consider buying. You can check out my comprehensive list of stockbrokers here in Singapore (updated Nov 2020). On the other hand, since the HKD is currently still pegged to the USD and USD has been weakening (more ahead with printing press going brrr), one buying the HKD listed and denominated ETF will face that immediate and more evident risk. … For those who are interested to find out more about investing in these China ETFs, you can check out the next segment. For Bilibili, it closed at HK$809.50 today, and its ADR (which represents 1 share of Bilibili) opened at US$104.36. Using the current USD/HKD FX rate of 7.766, assuming all things equal, we would have expected it to open in the US market at 809.50 / 7.766 = $104.24. Hitting $100k in savings may seem impossible, but it really boils down to 5 easy steps. LINKEDIN. This is a list of all Internet ETFs traded in the USA which are currently tagged by ETF Database. Syfe’s Robo advisory platform now allows you to partake in the China market through their Equity100 and Core Portfolio. So the price difference is very marginal and more a consequence of market movements between the time HK closes and US opens. Most of the time, it … This fund is however not rated by Morningstar. This fund has a Morningstar rating of 3 stars with an expense ratio of 0.59% which is around the average level. A second implication is that there’s hardly any volume traded, which opens the risk for a big price gap risk during purchase/sale of this ETF. With China coming out … A possible implication is that the ETF provider finds this unprofitable and decides to close it down, and you might end up liquidating at a bad market timing. Save my name, email, and website in this browser for the next time I comment. However, the US-domiciled ETFs we shortlisted can still be optimal, as these ETFs have generally low dividend yields of less than 1%, so the impact from dividend withholding taxes is less significant. While KGRN looks like a good consideration, it is relatively small in terms of its net assets at only US$16m compared to CXSE with US$441m in net assets. To that end, the KraneShares CSI China Internet ETF (NYSEARCA: KWEB) could be a great fund to buy. iShares PHLX Semiconductor ETF. So, wouldn’t an investor get relatively more exposure to Cloud by buying Baidu? What’s important is the forex due to the main underlying earnings. As long-term investors, we do see a strong basis for building up exposure to China Tech stocks now. Baidu’s valuations are inexpensive in our view at 22x forward P/E, factoring in the growth engines that augment Baidu’s core advertising business. We highlight instances where US-domiciled ETFs may actually still be relevant, despite a 30% or higher withholding tax rate. We compiled the withholding tax rates applied to foreign stock dividends, across several countries. By submitting your email below, you are consenting to our privacy policy. It’s also worth checking whether an ETF includes Australia, India, Singapore and Hong Kong. Not many people think of Baidu as a high growth “Cloud Computing” company. After reading your article, I am still unable to decide after a few research. As the damage seems to be contained and fundamentals of these companies have not changed, some investors might take the view that the sell-off in these stocks is technical and short-term in nature. Let’s see how liquid HST will be. We can also imagine these EVs will have potential synergies with the earlier mentioned Apollo business unit. The speciality of investing in China … The largest China ETF … More important is the prospects of the underlying companies/assets. The best performing China ETF is KranShares MSCI China Environment Index ETF (KGRN), with a YTD return of 116.5%. My personal favorite among this list of China ETFs are as follows: EWT: Taiwan exposure with key holdings in stocks such as TSMC which is a major beneficiary of the current global chip shortage. Some investors buy Alibaba for its cloud segment, as Alibaba Cloud has the largest market share of ~40% in China. At these valuations, it would imply that Baidu’s current cloud division could currently be worth about US$20 billion (or 27% of Baidu’s current market cap), which is significant. KGRN, which was the best performing ETF in 2020 with a massive return of c.116.5% over 11 months in 2020, was the worst-performing China ETF in 2021, with a negative return of 9%. Learn everything you need to know about KraneShares CSI China Internet ETF (KWEB) and how it ranks compared to other funds. 1 ETF. thanks and appreciate in advance. I mean consideration on in terms of the underlying company/sector/industry.. having difficulty to pick one. ESG Investing: Why we believe it’s a mega-trend that will continue, Amex Platinum Charge Card: Why we find the $1.7k annual fee cheap, Crude Palm Oil now at record-breaking prices: Why we bought First Resources. 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An expense ratio is the annual fee paid out of your investments in the US your consideration in this.!
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