There aren’t too many exchange-traded funds (ETFs) that get me excited. However, the newly-launched BetaShares Asia Technology Tigers ETF (ASX: ASIA) looks like an exciting new opportunity.
BetaShares is one of the most versatile ETF providers in Australia with many different offerings such as BETANASDAQ ETF UNITS (ASX: NDQ), BetaShares Global Agriculture ETF (ASX: FOOD) and Betashares Global Cybersecurity ETF (ASX: HACK).
The new Asia Technology Tigers ETF looks to give exposure to 50 of the most innovative and disruptive technology companies in Asia. It is almost like the Asian version of the NASDAQ ETF.
Asia is a fast-growing economic region with an increasingly tech savvy population that uses their phones to do a lot of their purchasing, socialising and so on. Some of the Asian giants completely dominate in China, just like Facebook, Google (Alphabet) and Amazon do in Western countries.
Holdings that represent 7.5% of the ETF portfolio, or more, are: Taiwan Semiconductor Manufacturing, Alibaba, Samsung, Tencent and Baidu. Other top-10 exposures include Infosys, Hon Hai Precision Industry, SK Hynix, JD.com and NetEase.
Whilst these businesses may dominate in their own countries, they also have plans to expand in dozens of other countries. They could become global titans in their own rights.
The risks of Asian businesses are certainly higher than typical American or ASX businesses. Ownership issues, governments and management are all potential problems. I wouldn’t put 50% of my portfolio into this ETF.
However, there is potentially less risk to this ETF than say investing in Chinese banks due to the high level of debt.
There are now quite a few different ways to get exposure to investments in Asia with this ETF along with Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) and UBS IQ MSCI Asia APEX 50 Ethical ETF (ASX: UBP).
The current trade war may present a good opportunity to buy into Asian shares. Of course, it could keep getting worse between the US and China but that might just make it more attractively valued.
The new BetaShares Asia Technology Tigers ETF could generate strong returns over the long-term if the Asian economy and population keeps going more technological. It is fairly likely I will choose to invest into it over the next year.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.