For advisors and investors looking to tap into tech momentum outside the United States, China companies have emerged as a top choice.
This should not come as a particular surprise. The global investment community received a firm reminder about the capabilities of China tech companies earlier this year, when DeepSeek’s R1 model challenged the valuation prospects for AI companies across the globe.
Following this, many advisors and investors started to look to China companies for fostering long-term growth through tech innovation. However, ongoing tariff negotiations between China and the U.S. are causing some to be wary about the potential near-term risks of staying engaged with China companies.
Luckily, risk-adverse investors have plenty of tools at their disposal to mitigate exposure to tariff turbulence. One straightforward means of doing so is investing in a diversified emerging market strategy.
How KEMQ Tackles China Tech Investing
For example, take a look at the KraneShares Emerging Markets Consumer Technology Index ETF (KEMQ ). This fund seeks to generate long-term growth through a diversified portfolio of competitive tech companies within emerging markets.
Although KEMQ offers significant country diversification, the fund still holds plenty of China exposure. China remains the top country within KEMQ’s portfolio, accounting for nearly 40% of the portfolio weight. However, the fund provides crucial diversification through other competitive emerging markets, such as South Korea, Taiwan, and Brazil.
By holding a heavy tilt toward China, KEMQ can continue to participate in rallies within the country’s tech sector. Meanwhile, the remaining countries within KEMQ’s portfolio can provide more avenues for fostering long-term growth. Additionally, these countries could continue to bolster KEMQ with returns, even if China’s market gets rattled by tariffs.
So far, KEMQ’s strategy has provided its investors with highly compelling results. As of May 31, 2025, the fund’s NAV has risen nearly 20% YTD. These results showcase what the fund can offer to an investor’s portfolio, even if exposure to China becomes a bit of a harder sell.
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