In a previous post, I shared my thoughts after reading “Minimum Economic Topics” by Hong Chun-Wook. While the book paints a cautious picture of China’s economic slowdown and structural challenges, I came away believing that Chinese equities remain undervalued compared to markets like the US and India. In particular, China's major technology companies still offer compelling valuations and play a significant role in the global economy.
The previous post is linked below ⬇️
That said, I’ve set some criteria for investing in Chinese stocks:
- Companies benefiting from government policy support
- Participation in AI and next-generation technologies
- Global competitiveness in their respective industries
While searching for an ETF that matches these standards, I discovered the DRAG ETF, listed on the U.S. stock market. This fund provides a concentrated portfolio of a few of China’s leading tech firms, aligning perfectly with the strategy I had in mind. In this post, I’ll introduce what DRAG ETF is and why it deserves attention.
ETF Overview
- Fund Name: Roundhill China Dragons ETF
- Ticker: DRAG
- Assets Under Management: $30.06 million (approx. KRW 41.3 billion as of 2025/6/19)
- NAV: $25.01 (as of 2025/6/19)
- Volume: 2,293 shares (as of 2025/6/12)
- Expense Ratio (annual): 0.59%
Investment Strategy
- A concentrated portfolio of 5–10 large-cap Chinese tech companies
→ Includes Tencent, Alibaba, Xiaomi, and BYD—companies shaping not only China’s economy but also the global tech landscape
→ As the portfolio is centered around a handful of names, it carries elevated risks related to individual company performance, policy shifts, and market sentiment
→ Helps avoid small-cap risk; particularly useful for Korean investors who may have limited access to reliable information on smaller Chinese firms, or concerns over accounting transparency - Focused on companies with high innovation and long-term growth potential
- Designed to give U.S. investors exposure to leading Chinese tech firms via ADRs
Top 6 Holdings
| Ticker | Company Name | Industry | Business | Weight |
|---|---|---|---|---|
| XIACY | Xiaomi Corporation | Technology | Smartphones (Mi, Redmi), IoT devices (Mi Band, air purifiers), smart appliances (Mi TV, robot vacuums) |
18.91% |
| TCEHY | Tencent Holdings Ltd | Technology | Messaging app (WeChat), online gaming (Honor of Kings, PUBG), cloud services (Tencent Cloud), fintech (WeBank) |
18.04% |
| BYDDY | BYD Co Ltd | Automotive | Electric vehicles (BYD Han, Dolphin), Blade Battery, semiconductors, energy storage systems (BESS) |
17.00% |
| BABA | Alibaba Group Holding | E-commerce | Taobao, Tmall, cloud computing (AliCloud), fintech (Ant Group, Alipay) |
15.53% |
| MPNGY | Meituan | Platform Services | Food delivery (Meituan Waimai), hotel & travel booking, local services platform, livestream commerce |
14.77% |
| PDD | PDD Holdings Inc | E-commerce | Social commerce (Pinduoduo), AI-powered agricultural marketplace, discount e-commerce, global platform (Temu) |
15.26% |
DRAG ETF stands out for its high-conviction approach—selecting only the few giants at the center of China’s tech ecosystem. With names like Tencent, Alibaba, Xiaomi, and BYD leading the portfolio, DRAG offers investors a focused bet on firms that wield influence not only in China but across the global tech landscape. For those looking to invest in long-term innovation and avoid the noise of broader markets, DRAG could be a compelling addition to the portfolio.
댓글
댓글 쓰기