Asia hosts a rather robust population and it isn’t surprising that the region will experience a huge growth in tech users as the countries develop. Technology companies, along with related exchange traded funds (ETFs), could benefit from the greater exposure to the growing digital market.
In June 2010, China’s “netizenship” reached 420 million, but the ratio of internet users remains rather low at 31.8%, compared the 70% in the U.S. market, writes Dian L. Chu for Daily Markets. According to McKinsey Quarterly, Asia’s internet users will shoot to 1.1 billion by 2015, and the growing market may generate more than $80 billion in internet commerce, access fees, devices sales and more. [Tom Talks Tech ETFs on CNBC.]
McKinsey projects that China’s internet users will double to 55% of the population and India’s internet users could increase five-fold to 28%. China has one of the world’s biggest optic transmitting network and the country is investing billions in the network infrastructure. [Why Tech ETFs Are Down…But Not Out.]
However, foreign tech companies have had a hard time penetrating Asia’s markets, mostly as a result to market-specific factors like policies and cultural differences. Meanwhile, domestic firms have already established themselves. China may start to relax restrictions on foreign companies, but established domestic companies may likely hold the dominant positions. [Tech ETFs: Sentiment Turns on a Microchip.]
For more information on the technology sector, visit our technology category.
- Global X China Technology ETF (NYSEArca: CHIB)
- Guggenheim China Technology ETF (NYSEArca: CQQQ)
- iShares China ETF (NYSEArca: FXI)
- iShares MSCI Taiwan Index Fund (NYSEArca: EWT)
- iShares S&P Global Technology (NYSEArca: IXN)
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.