As the mobile gaming industry in China grows on rising demand from an emerging middle class, investors can take a targeted approach with China technology sector-related exchange traded funds.
For example, the KraneShares CSI China Internet ETF (NasdaqGS: KWEB), which tracks a group of Chinese Internet stocks, has gained 20.9% since its August 1 debut.
There are more Internet users in China than there are people in the U.S., but Internet penetration in China is still low relative to developed markets. [China Stocks, Hong Kong ETFs Could Surge in 2014]
Looking ahead, J.P. Morgan expects China’s mobile games market cap to reach $20 billion in 2014, reports Shuli Ren for Barron’s.
J.P. Morgan points out that “mobile gaming names are valued at much higher multiples than PC gaming names” and the industry could represent 29% of PC gaming market next year.
The analysts, though, point out that investors are better off gaining exposure to the mobile gaming industry through distributors instead of developers because of the hit-or-miss nature of the gaming industry.