Emerging-market tech stocks, concentrated in China, have held up better than their U.S. counterparts in the recent market correction. The Emerging Markets Internet & Ecommerce exchange-traded fund (ticker: EMQQ) has fallen 9% since Sept. 1, compared to 13% for the iShares U.S. Technology ETF (IYW). Year-to-date, the emerging market ETF is up 44%, against 23% for the U.S. tech basket.
That’s giving emerging-market investors something to brag about after years of under-performance, but also got them looking beyond the high-flying Chinese internet for future returns. “We’ve been trying to maintain some more balance, not go all in on the Chinese tech names,” says Brian Bandsma, emerging market equities portfolio manager at
Twin Chinese giants Alibaba Group Holding (BABA) and
(700.Hong Kong) still look to be on solid ground, despite year-to-date gains of 26% and 34%, respectively. They remain cheap relative to U.S. peers.