How exposed is the Asia Technology Tigers ETF to China?

Has China dented this ETF's returns in 2022?

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The BetaShares Asia Technology Tigers ETF has had a shocker of a year so far
  • This tech-based fund covers many different economies
  • But how much is it exposed to the Chinese markets?

This year has not been kind to the BetaShares Asia Technology Tigers ETF (ASX: ASIA). This technology-focused ASX exchange-traded fund (ETF) was arguably a favourite of growth investors for many years, thanks to some impressive returns in its early days.

But this year has been especially brutal for this ETF. Since the dawn of 2022, BetaShares Asia Technology Tigers units have lost a painful 35%. That's based on yesterday's closing price of $6.15.

Since the ETF's all-time high of over $14 a unit that we saw back in early 2021, the fund is down more than 56%.

Now, one might assume this may have something to do with China. After all, the world's second-largest economy has arguably been undergoing some changes in investors' perceptions in the past year or two.

Between trade wars with the United States, tensions over the Taiwan Straight, and the country's zero-COVID policies, investors have had a lot of fat to chew.

But exactly how exposed to the Chinese market is the BetaShares Asia Technology Tigers ETF?

How exposed is the BetaShares Asia Technology Tigers ETF to China?

Well, let's go to the source. According to the provider, as of 30 September, the Asia Tigers ETF's portfolio was weighted 55.2% towards companies domiciled in China. That was far higher than any other country. That includes Taiwan at 20.2% and South Korea at 15.9%.

We can see this reflected in the ETF's major holdings. Chinese e-commerce giant Alibaba Group was by far the fund's largest individual holding. It accounted for a whopping 10.2% weighting in its portfolio.

Another Chinese giant – Tencent Holdings – made up 9.3%, while Pinduoduo Inc and JD.com Inc accounted for a further 6.1% and 5%, respectively.

So we can rather decisively conclude that this ETF is heavily exposed to the Chinese markets.

And this partly explains why this ETF has had such a rough trot in 2022 thus far. Alibaba stock is down a nasty 36.35% so far this year. Tencent is faring even worse, sitting at a 45.5% loss.

Thus, it seems that the Asia Tigers ETF has been hit hard by its heavy exposure to the Chinese markets in 2022 so far. But who knows what the future might bring.

The BetaShares Asia Technology Tigers ETF charges a management fee of 0.67% per annum. It has now returned an average of 3.21% per annum since its inception in September 2018.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended JD.com and Tencent Holdings. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF and JD.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

A piggy bank on the cloud in the blue sky symbolising a record high share price.
Record Highs

Here's why the Vanguard Australian Shares Index ETF (VAS) just hit an all-time ASX high

If you own this ETF, you've had a great day.

Read more »

ETF on different coloured wooden blocks.
ETFs

Top 10 most traded ASX ETFs in June

The most traded ASX ETF was the ever-popular Vanguard Australian Shares Index ETF.

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
ETFs

Own the Vanguard Australian Shares Index ETF (VAS)? Here's how much you'll get paid today

Today's VAS paycheque might disappoint some investors.

Read more »

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

Why I'd still call the FANG+ ETF a buy

The US tech giants have been great performers.

Read more »

The letters ETF with a man pointing at it.
ETFs

Buy and hold these ASX ETFs until 2030

Looking for long term options? Check out these picks.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
ETFs

Should Aussies choose Vanguard Australian Shares Index ETF (VAS) or a term deposit for passive income?

Both investment options come with positives and negatives.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
ETFs

Where to invest $5,000 into ASX ETFs in July

Could these funds be a good place to invest your money?

Read more »

A woman sits at her desk thinking. She is surrounded by projections of world maps on various screens with data appearing below them.
ETFs

These top ASX global shares ETFs delivered stunning returns of 50% to 70% last year

We reveal the 6 best-performing ASX ETFs providing Aussie investors with international market exposure.

Read more »