China ETF — Guggenheim China Technology ETF (CQQQ)
It’s hard to bet on China without some exposure to technology. And if you’re technically inclined, this particular China ETF is a great way to bet on China’s future.
The Guggenheim China Technology ETF (CQQQ) is the Chinese equivalent of the QQQ. At least 80% of its $70 million in total assets are invested in ADRs or other commonly used depositary receipts. Tracking the AlphaShares China Technology Index, it seeks to follow the universe of publicly-traded companies in China and Hong Kong that participate in the information technology sector.
Rated four stars by Morningstar when compared with 20 other China ETFs, CQQQ invests 24% of its assets in mid caps and another 5% in small caps providing investors with a greater exposure to smaller Chinese stocks. Tencent Holdings (TCEHY) is the largest stock, representing 11.1% of the ETF’s portfolio. Relatively expensive when it comes to technology ETFs (with a 0.7% expense ratio), it’s not nearly as bad compared to the average MER for China ETFs.
If you don’t want to pay the MER but still want technology exposure I’d recommend you buy something like the SPDR Technology Fund (XLK). However, if you don’t mind paying for excellence, then you’ll do fine by the CQQQ. Just remember that occasionally it can get quite volatile, which isn’t uncommon for China ETFs.