As U.S. tech stocks slip on faltering AI investor confidence, looking to opportunities abroad could prove beneficial. The KraneShares Emerging Markets Consumer Technology Index ETF (KEMQ ) increases portfolio diversification while also capturing strong consumer tech growth in emerging markets.
A series of recent AI setbacks caused a broader pullback in U.S. tech stocks this week. Whether a stumble for AI stocks or the beginning of a fall remains to be seen. But it’s a sharp reminder of the value of diversification. Additionally, ongoing volatility and uncertainty within U.S. markets casts a shadow over near-term domestic outlooks.
In this year’s challenging environment, international tech stocks appear attractively positioned, particularly consumer technology stocks. As advisors and investors increasingly look to opportunities overseas, KEMQ is a fund worth consideration, given its strong performance this year. Ongoing regulatory support in a variety of countries could drive tailwinds for consumer tech companies, while foreign technology stocks enhance diversification potential.
Notable Tech Outperformance & Portfolio Diversification
KEMQ offers exposure to consumer technology within emerging markets by seeking to track the Solactive Emerging Markets Consumer Technology Index. It provides exposure to the emerging market equivalents of Google, PayPal, Amazon. The strategy is poised to capture growing internet adoption trends across emerging market economies.
The fund is up 42.68% YTD as of August 22, 2025, per Y-charts data. KEMQ also currently trades above both its 50- and 200-day simple moving averages (SMAs). Funds and stocks that trend above their SMAs are considered in solid buy territory for trend followers.
KEMQ focuses on internet retail and e-commerce growth in 26 emerging market countries, including China. The fund’s structure ensures diversification because of its limitation on country inclusion. One country only accounts for 40% of the fund at rebalance, with a maximum holding weight of 3% at rebalance. Top country exposures included China (45.62%), South Korea (23.74%), and Taiwan (11.30%) as of July 31, 2025.
KEMQ has an expense ratio of 0.50% with a fee waiver that expires on August 1, 2026.
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