Invesco China Technology ETF

CQQQ

Market cap $2.88B

Easing tensions between China and the U.S. may be supportive of markets. Still uncertainty amid plans for Trump to visit China in 2026.

U.S. tech equities driven by the artificial intelligence (AI) theme have been a prime catalyst for market gains this year. Have valuations exceeded their underlying fundamentals?

It's been a good year for international equity ETFs. As a category, broad exposure funds tapping into both developed and emerging market equities have delivered outsized gains relative to U.S. markets this year, as well as much sought portfolio diversification.

Fearing an AI bubble? Rotate into AI-fueled ETF areas like XSW, CQQQ and BOTZ as software, China tech and robotics may still offer gains, per Amundi?

China's GDP slows to 4.8%, raising hopes of policy easing. Likely rate cuts may drive ETFs like KWEB, CQQQ, FXI & MCHI in the coming months.

Global market leadership may be shifting again as trade tensions escalate, the U.S. dollar trades at multi-year lows, and gold at all-time highs. This brings back for the second time this year the quest for the best international ETFs. The most recent global outlook from the IMF points to ongoing strengths in emerging markets and developing economies vs. the U.S. and other advanced economies in 2026.

Invesco China Technology ETF is under pressure due to US-China tech tensions, but its holdings may not be the real losers. CQQQ focuses on large-cap Chinese tech, with a growth profile and higher valuations than the MSCI China average. But CQQQ might not be the real loser in this trade conflict, and this makes it interesting to analyze the potential price bottoms.

Despite mounting macro headwinds at the start of the year, Chinese equities have continued to deliver positive performance. While near-term flows can provide further upside, the durability for the equity rally will hinge on policy choices ahead.

Getting emerging market exposure is a viable option in the current market environment. That's especially so given the global de-dollarization and prospect of further rate cuts by the Federal Reserve.

CQQQ, KWEB and KTEC have surged as China's low rates, AI push and tech giants' rally fuel investor interest in the sector.