The purpose of this ETF is to give investors access to technology companies that are listed in Asia, outside of Japan.
There are a few different things to think about this potential investment:
The ASX doesn’t have a lot of large technology businesses in its ranks. A lot of the ASX are also focused on certain industries like commodities and banking.
Betashares Asia Technology Tigers ETF gives diversification in multiple ways for potential investors.
There are a few different countries that are represented within the portfolio: China (making up 44.9% of the allocation), Taiwan (26.2%), South Korea (18.2%) and India (7.5%).
There are numerous technology sectors that investors can get exposure to through this ETF.
The ones that have sizeable positions include: internet and direct marketing retail (25.2%), semiconductors (20.9%), interactive media and services (17.4%), tech hardware, storage and peripherals (11.2%), interactive home entertainment (10%) and IT consulting and other services.
BetaShares says that due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.
Looking at the 50 businesses in this tech portfolio, there are some large and growing ones like: Taiwan Semiconductor Manufacturing, Tencent, Samsung Electronics, Alibaba, Meituan, Sea, JD.com, Infosys, Pinduoduo and Netease.
Past performance is no guarantee of future performance. However, the returns of Betashares Asia Technology Tigers ETF has shown how quickly the group of businesses have been growing. Over the last three years, the ETF has achieved an average return per annum 19.4%.
Potentially cheaper than western counterparts
Asian businesses typically have lower valuations than some of the biggest US tech companies.
BetaShares says that Betashares Asia Technology Tigers ETF has a forward price / earnings ratio (p/e ratio) of around 20.
Looking at one of the other ETFs that BetaShares offers is Betashares Nasdaq 100 ETF (ASX: NDQ), which is a tech-heavy portfolio of US shares with names like Apple, Microsoft, Amazon, Tesla, Alphabet, Facebook, Nvidia, PayPal and Adobe.
The Betashares Nasdaq 100 ETF has a forward price/earnings ratio of almost 27.
Concerns about China’s economy
However, whilst there are compelling reasons to consider this ETF. It may also be worth noting that the Chinese economy is coming under focus with concerns about Chinese real estate developers – particularly Evergrande – and factoring in what that would mean if there was a flow-on effect to other businesses and other parts of the economy.