The ASX tech sector has become very famous over the past few years. Tech winners like Xero Limited (ASX: XRO) and Afterpay Ltd (ASX: APT) have prompted many an investor to try and find the ‘next Xero’ or the ‘next Afterpay’. Unfortunately, unlike some other markets, the ASX tech sector holds a relatively small slice of the Australian share market.
Thus, if you are really bullish on tech, it might be prudent to look beyond our shores to bolster your portfolio.
That’s where this ASX exchange-traded fund (ETF) comes in.
The BetaShares Asia Technology Tigers ETF (ASX: ASIA) is an ETF dedicated to tracking the best tech companies in Asia, outside of Japan. Asia is the most populous continent on the planet. Despite this, it’s also an area where the big US tech companies have a far more limited reach and scope than in advanced economies like the US and Australia. Alphabet Inc‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google is essentially banned in China, after all. As is Netflix Inc (NASDAQ: NFLX) and Facebook Inc‘s (NASDAQ: FB) products.
Asian tech tigers roar
That’s where the usefulness of an Asian tech company like Baidu might come in handy. It’s often described as the ‘Google of China’. Or iQiYi, the ‘Netflix of China’. Not to mention the pervasive dominance of Chinese ecommerce companies like Tencent Holdings, JD.com or Alibaba Group Holding Ltd. These companies dominate both the Chinese e-commerce market, as well as China’s social media scene.
All of these tech companies are major holdings of the BetaShares Asia Technology Tigers ETF. Other holding include the global electronics titan Samsung Electronics Co. As well as the giant computer chip manufacturer Taiwan Semiconductor Manufacturing Co Ltd.
But China is the country that dominates this ETF with 54% of the fund’s holdings. Taiwan comes in second with 22%, with South Korea, India, and Hong Kong rounding out the list with 18.3%, 4.8%, and 0.2% respectively.
But turning to performance, and we can really see the value of investing in the Asian tech sector. The index that the ASIA ETF tracks has returned an average of 26.3% over the past 3 years and 29% per annum over the 5 years. The ASIA ETF itself has returned 36.5% per annum since its inception in 2018. As well as a whopping 70.34% over the past 12 months alone. It charges a management fee of 0.67% per year.
Where to invest $1,000 right now
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Facebook. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Alphabet (A shares), Baidu, Facebook, JD.com, Netflix, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Facebook, JD.com, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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