Capture China's Focus on Innovation in 1 ETF | ETF Trends

China’s massive economy can only benefit from efficient deployment of technology. As the country looks towards more self-reliance, technological innovation will be at the forefront, giving investors a potential growth opportunity.

Investment dollars by the Chinese government will help spur innovation. The country is already one of the early adopters of advanced technologies like 5G.

“The country’s sustained public and private investment in research and development, is creating a solid platform to base a tech-driven economy; the massification of the use of these advancements could eclipse that of the U.S. in less than two decades,” said Pola Grijalva, the CEO of the World Trade and Investment Group and president of the China Chamber of Commerce and Technology Mexico.

“For example, China, as of today, leads the way in the deployment of 5G technology,” Grijalva said. “The remarkable advances in artificial intelligence in the management and application of big data can give rise to the boost of the internal market. According to the World Intellectual Property Organization, China is the leader in the registration of patents since 2019, with a focus on IT and Telecom.”

Chinese Innovation in 1 Fund

Investors can get exposure to this growth opportunity in Chinese innovation in the form of one exchange traded fund (ETF): the Global X China Innovation ETF (KEJI). Instead of following a passive index, the fund utilizes active management for dynamic market exposure.

Per its fund description, KEJI seeks to achieve long-term growth of capital. Normally, the fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in exchange-listed companies that are economically tied to China.

The ETF offers investors:

  • High growth potential: KEJI enables investors to access high growth potential through companies at the leading edge of multiple disruptive themes re-shaping China’s economy.
  • Experienced portfolio managers: KEJI’s portfolio managers have extensive track records in actively-managed equity strategies targeting both China and disruptive innovations tied to its economy.
  • ETF efficiency: In a single trade, KEJI delivers access to dozens of companies across a range of disruptive themes, along with the outperformance potential of active management.

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