It seems like only yesterday that most Chinese Internet stocks
not called Baidu (NASDAQ:
) and a couple of other big names were left dead. Being the
), Facebook (NASDAQ:
) or Match.com of China, the world's largest Internet market, was
not enough for some Chinese web names to draw favor among U.S.
Actually, yesterday was a fine day for Chinese Internet
stocks. While some of those names are succumbing to profit taking
on Tuesday, there is no denying Chinese Internet stocks, broadly
speaking, have been surging in recent weeks. So have two niche
devoted to these stocks.
Often assailed for being too small, too narrowly focused or
too thinly traded, the Guggenheim China Technology ETF (NYSE:
) and the Global X NASDAQ China Technology ETF (NASDAQ:
) have been on fire in recent weeks. CQQQ, the larger of the two
ETFs with $19.7 million in assets under management, was higher by
10.3 percent over the past month heading into the start of
trading Tuesday. The Global X NASDAQ China Technology ETF, which
has just $3 million in AUM, jumped 12.4 percent over the same
CQQQ is home to 39 stocks and its lineup is a mixed of
U.S.-traded and Hong Kong-listed names. NetEase (NASDAQ:
), Sina (NASDAQ:
) and Baidu are the largest U.S.-listed stocks in CQQQ's lineup,
combing for 21 percent of the ETF's weight. Tencent Holdings is
the fund's largest holding with an allocation of almost 9.2
That trio of U.S.-listed Chinese Internet names are boosting
CQQQ's fortunes. Over the past month, Baidu is the WORST
performer of the three with a gain of 4.3 percent (prior to
Sina has surged more than 21 percent in the past month and
that has turned out to be good news for QQQC, the Global X
offering, because that stock is the ETF's largest holding at a
weight of 8.75 percent. QQQC is home to 27 stocks and Sina,
Tencent and Baidu combine for about 23 percent of the ETF's
The fund's are not mirror images of each other. For example,
QQQC features a 3.82 percent weight to Foxconn, the controversial
assembler of some Apple (NASDAQ:
according to Global X data
. The Guggenheim ETF does not feature Foxconn in its lineup.
On the other hand, Sohu.com (NASDAQ:
), Giant Interactive (NYSE:
) and Renren (NYSE:
) combine for 7.6 percent of CQQQ's weight. The Global X fund
does not include Giant Interactive or Renren among its holdings.
Neither ETF holds shares of online game maker Perfect World
) and that is too bad because the stock has surged 28 percent in
the past month.
Interestingly, neither ETF holds Ctrip.com (NASDAQ:
), the Priceline.com (NASDAQ:
) and one of the older U.S.-listed Chinese Internet stocks.
Again, that is too bad because Ctrip has gained more than 10
percent in the past month.
On valuation, CQQQ is less expensive with a P/E of 12.5 and a
price-to-book ratio of 1.8,
according to Guggenheim data
. QQQC has a P/E of 16.15, but a lower price-to-book ratio.
Cost-conscious investors can settle the debate by preferring
the Guggenheim offering due to the fact that its current premium
to its net asset value is just 12 cents compared to a premium of
over $1 for QQQC.
For more on ETFs, click
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