BetaShares has launched the Asia Technology Tigers ETF (ASIA), which provides local investors with access to a group of the most innovative and disruptive companies in Asia.
ASIA aims to track the returns of an Index comprised of the largest 50 companies by market capitalisation in the technology and online retail industries, and which have their main area of business in the fast growing Asian (ex-Japan) region.
The companies that ASIA invests in are revolutionising the lives of billions of people and include Alibaba, Tencent, Baidu, Samsung and JD.com. BetaShares’ CEO, Alex Vynokur, says: “Due to its younger, tech-savvy population, Asia is quickly surpassing the West in terms of online activity and technological advancements, and the Asian technology sector is anticipated to remain a rapidly growing sector.”
“Australian investors are likely more familiar with US tech titans such as Facebook, Apple, Amazon and Google. But if they look a bit closer to home, they’ll uncover a number of Asian businesses that are dominating in this part of the world,” he adds.
ASIA’s current portfolio includes companies with their primary region of business in China, Taiwan, South Korea, India and Hong Kong, areas which Australian investors may otherwise find difficult to access directly.
While the growth of the underlying companies within ASIA’s portfolio has been significant, the Index is currently trading at a significant valuation discount to U.S. technology stocks. For example, the current Forward Price/Earnings ratio for the Index which ASIA aims to track is 13.2x, which compares favourably to the NASDAQ-100 Index’s valuation of 21.4×2.
“Australians have a natural home bias when it comes to investing and given the difficulty and cost of investing directly in Asian sharemarkets, may often miss out on compelling investment opportunities in the region. ASIA allows investors to obtain access to a currently relatively reasonably priced, rapidly growing sector in a rapidly growing part of the world as easily as buying any share on the ASX,” says Vynokur.
