It seems new ASX ETFs are becoming more and more focussed as providers aim to tap into specific investing themes.
The new Global X China Tech Etf (ASX: DRGN) is a perfect example.
The fund holds 20 Chinese technology companies listed in Hong Kong and Mainland China.
If you bought this ASX ETF when it first listed in May, you would be ecstatic with the results.
At the time of writing, the fund is up 28.31% since its initial listing.
Image source: Getty Images
ETF Overview
According to Global X, this ASX ETF is designed to track the performance of 20 leading technology companies listed in Mainland China and Hong Kong.
The index selects across 15 innovation-linked sectors, including semiconductors, automation, industrial software, and internet platforms.
Eligible companies are screened using a rules-based methodology. This incorporates market capitalisation, trading liquidity, one-year sales and earnings growth, and free cash flow yield. Constituents are market cap weighted with an 8% to manage concentration risk.
Global X's China Technology ETF (DRGN) captures the domestic champions that stand at the heart of China's innovation drive, offering targeted exposure to its efficiency-led, state-supported pathway.
Can US and Chinese Innovation Coexist?
The United States and China are dominating headlines again this week as escalating trade and tariff conflict reignites fears of a global economic slowdown.
With new 100% tariffs on Chinese goods being discussed by US President Donald Trump and Beijing retaliating through export controls and port fees, markets are reacting with heightened volatility.
In a recent report, Global X reinforced that the rivalry between the US and China is often framed as a contest with a single winner. However the truth is more nuanced.
The ETF provider said the US innovation model continues to dominate frontier breakthroughs in AI and semiconductors. This is supported by hyperscaler spending and private-sector capital.
Meanwhile, China's strategy emphasises efficiency and scale, diffusing innovation rapidly across industries even under hardware restrictions.
Exposure to both markets may provide investors with balance: frontier growth from the US alongside broader adoption from China.
Many investors will already have exposure to US markets through ASX ETFs. However the DRGN fund, may be an opportunity for Australian investors to gain exposure to these Chinese technology companies.
This gives exposure to large Chinese companies engaged in robotics, IoT, semiconductors and AI ecosystems set to continue growing thanks to policy and innovation.
