China Wise - Tech Wiser

China has seen a fair amount of activity coming from US investors particularly in the sector based ETFs

. The facts & figures, the forecasts available to investors somehow present an all-round rosy picture for the sectors contributing to countrys GDP. In particular the Investments in Technology sector ETFs, for a larger part of past decade have fetched good returns & since the last major crash of 2007 have shown better valuation recoveries too .What every individual (looking to invest in China) is asking is that how much of this phenomenal sudden growth of past few years is sustainable? The state policies, Chinas own internal labour issues & an unclear implication of any further rise in Yuan on the capital markets, has only made investors more cautious.

Showing a lot of positivity in these uncertain markets is the China Technology Sector Funds, & the ones with heavy allocation in Ecommerce & Internet industry may show an effective resistance to any inflation caused due to Yuan fluctuation & can even sustain a slower economic growth. Whether Chinese Economy grows at 7 % or 10 %, the investments in the technology industry of China should reap a good return for a careful investor.

Did you know that Chinese account to more than 20% of global internet penetration, much higher than USA and what is noteworthy is that, only close to 41 % of Chinese are active internet users. Same goes with total number of smart phone users, where China again is a global leader, but with millions of Chinese still not using them.

House hold Income, too in China is growing like never before, in-fact it has swelled up to 10 times in the last five years. E-commerce giants like Tencent Holdings, Baidu [Chinese version of Google] have grown enormously as companies, owing their growth to the Chinese population. Areas like Digital Marketing are already set to grow at 18% in the 2012 itself.

American investors & companies are already making timely moves. Think-tanks at Microsoft are reviewing its business plan for their Chinese Digital Advertisement wing & early this year Alibaba [Chinese counterpart of Amazon] saw some major investments coming from USA, notably at discounted equity prices. Whether it is the sheer richness of Chinas people resources, or the way Chinese tech companies have adapted to viable technology platforms with good corporate governance, China Technology funds provide an opportunity that few US investors would miss at this point & time.

It is not only the Ecommerce Sector which is encouraging, China has shocked with its growth rate in the technology manufacturing sector as well. In 2011,it accounted to more than 70 % of mobile phone production of the world & about 90 % of computers / Pc produced in the same year were made in China. In terms of Colour TVs & Digital Cameras, China was responsible for close to 50% of the total global manufacturing. Since 2010 Semiconductor Industry Consumption in China has shown ten times more growth than the entire world put together& is a 100 billion dollar industry in China today. Telecom too has given major growth pointers, the ecommerce & digital marketing uproar will contribute to it, as most of the user experience is going to be through smart phones & mobile apps.

When choosing a good China Technology sector ETF, one should look for a balanced exposure that it provides, thereby minimising the risk potential. Ideally a fund that covers ecommerce& internet based companies & top tech manufacturers. Of particular interest is Global X NASDAQ China Technology ETF [QQQC], not only providing a uniform allocation, but since last year November it is tracked through& reflecting the performance of the NASDAQ OMX China Technology index, thereby opening doors to increase its Net Asset Value.

by: stevesmith9899

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