Back to top

Should You Buy China Tech Stocks & ETFs Now?

Read MoreHide Full Article

Chinese technology stocks are surging today after many weeks of sell-off brought about by Beijing’s regulatory crackdown. Excellent results reported by (JD - Free Report) and Pinduoduo (PDD - Free Report) , as well as share buyback announcement by Tencent (TCEHY - Free Report) are helping the rebound.

The most popular China tech ETF (KWEB - Free Report) is still down more than 50% from its peak in mid-February. Tencent, Alibaba (BABA - Free Report) and Baidu (BIDU - Free Report) are among its top holdings. Despite rising uncertainty, some investors have continued to pour money into these beaten down stocks and ETFs.

KWEB has gathered more than $4 billion in assets since February though it remains to be seen whether the worst is over for China tech. Cathie Wood, one of the hottest fund managers on Wall Street currently, warned of a 'valuation reset’ last month as Ark sold most of Chinese stocks held in its ETFs. They bought back some stocks yesterday.

On the other hand, BlackRock said China should no longer be considered an emerging market and recommended investors boost their exposure to the country by as much as three times.

China has toughened its regulations on sectors ranging from internet, fintech to education and gaming, and introduced new rules about the collection and use of personal data.  It appears that the regulators are rewriting the business rules for companies that have grown too big and powerful to control.

To learn more about KWEB, Invesco China Technology ETF (CQQQ - Free Report) and iShares MSCI Emerging Markets Ex China ETF (EMXC - Free Report) , please watch the short video above.