It isn’t hard to see why exchange traded funds (ETFs) are becoming very popular with Australian investors.
Through just a single investment, these funds allow investors to invest in a large number of shares.
As well as making diversification easier, it means investors can gain exposure to indices, sectors, or themes that would have been almost impossible to do so 10 years ago.
One popular ETF that ASX investors might want to get better acquainted with is summarised below:
BetaShares Asia Technology Tigers ETF (ASX: ASIA)
The BetaShares Asia Technology Tigers ETF gives investors the opportunity to invest in some of the biggest and brightest technology and ecommerce companies that have their main area of business in Asia.
BetaShares notes that this funds provides diversified exposure to a high-growth sector that is under-represented in the Australian share market. There are a total of 50 companies included within the ETF.
One of these is Baidu, which is widely regarded as the Chinese version of Google.
As well as being the dominant search engine in China, Baidu has a keen focus on artificial intelligence (AI) and is aiming to be an autonomous vehicle giant. In 2019, the company ranked number one in the amount of AI-related patent applications in China for the second consecutive year.
Another company included in the fund is Alibaba. It is the Amazon of China and at the end of September had 757 million annual active customers.
Across its Alibaba, Taobao, and Tmall brands, the company is estimated to control a sizeable 56% of China’s e-commerce market. It also has a presence offline with a growing network of grocery stores, hypermarkets, and department stores.
A third company of note that you’ll be buying a slice of is Tencent. It is one of the world’s largest tech companies with a focus on video games and social media.
It is best known as the company behind the WeChat app, which is China’s most dominant instant-messaging service and currently has over 1.2 billion active users globally. In addition to this, the app has a virtual duopoly with Alibaba’s Ant Group in the mobile payments industry in the country. Tencent is also a substantial shareholder of Afterpay Ltd (ASX: APT).
The BetaShares Asia Technology Tigers ETF share price is up 63% over the last 12 months.
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More reading
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- US decides against delisting Tencent and other Chinese giants
- 2 quality ETFs for ASX investors in January
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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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