China-focused technology exchange-traded funds (ETFs) have been leading the charge this year-to-date, with many surging on the back of AI enthusiasm related to DeepSeek’s AI model launch. The top 30 China tech stocks, as tracked by the Hang Seng Tech Index, are up almost 30% for the year.
Several ETFs are benefiting from the rally in the China market, with equal-weighted exposure to five to ten Chinese stocks selected based on their size and innovation. At the top of the list is the Roundhill China Dragons ETF (DRAG), which has delivered a 32.11% return YTD, outperforming the Hang Seng Tech Index.
Other popular China tech ETFs include Invesco’s Golden Dragon China ETF (PGJ), KraneShares’ Hang Seng Tech Index ETF (KTEC) and CSI China Internet ETF (KWEB), as well as ProShares Ultra FTSE China 50 ETF (XPP). Leveraged plays on key security Alibaba have also seen significant gains, with the GraniteShares 2x Long BABA Daily ETF (BABX) gaining 174% YTD.
Investors looking for targeted ESG plays can consider WisdomTree’s China ex-State Owned Enterprise Fund (CXSE), which excludes state-owned companies and has gained 17.6% YTD. Meanwhile, KraneShares’ MSCI China Clean Technology Index ETF (KGRN) has rallied 18.3% YTD.
Despite the optimism surrounding China’s technology sector, some analysts remain cautious about the country’s structural economic challenges, including debt and economic fallout from the property bubble bursting. However, continued stimulus efforts could attract investors looking for bargains in a market that has already priced in much of the bad news.
Source: https://www.etftrends.com/disruptive-technology-channel/disruptive-theme-week-china-etfs-rallying-ytd