For investors seeking momentum, Invesco China Technology ETF (CQQQ - Free Report) is probably a suitable pick. The fund just hit a 52-week high, up roughly 39.7% from its 52-week low of $37.80/share.
But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
CQQQ in Focus
The fund is based on the FTSE China Incl A 25% Technology Capped Index. The index includes constituents of the FTSE China Index and FTSE China A Stock Connect Index that are classified as information technology securities, including China A-shares and China B-shares. CQQQ is charging 70 bps in fees. The fund has amassed $550.2 million in AUM.
Why the Move?
The world’s two largest economies, United States and China, recently announced agreeing on a phase-one trade deal. Within the trade pact, the United States has agreed to lower its 15% tariff to 7.5% on about $120 billion worth of Chinese goods. The country has also indefinitely suspended tariffs on roughly $160 billion of Chinese consumer goods, scheduled to be imposed on Dec 15. China has also released strong economic data. The industrial production increased 6.2% year over year in November, beating expectations. Retail sales in Beijing also rose 8% last month. These factors have raised the optimism among investors, making the fund an attractive pick.
More Gains Ahead?
Currently, CQQQ has a Zacks Rank #3 (Hold). However, it seems CQQQ might remain strong given a positive weighted alpha of 34.20.
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