Any investor considering buying into an exchange traded fund (ETF) here in North America is likely going to see a relatively high concentration of technology stocks in said ETF, unless of course such an investor would happen to be looking for a sector specific or regional ETF with less exposure to technology companies abroad.
Interestingly, a number of analysts are now pointing to the rise in the importance of technology companies in the make up of emerging market funds, meaning global technology exposure continues to ramp up as the global tech sector continues to far outpace most other traditional economic drivers in terms of growth.
One of the largest emerging markets ETFs is the iShares MSCI Emerging Markets ETF (NYSE:EEM). This fund has the majority of its exposure in Asia, with approximately 20% of this fund's exposure linked to some of the largest companies in the world such as Alibaba Group Holding Inc. (NASDAQ:BABA), Samsung Electronics Co. Ltd., Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM), and Tencent Holdings Ltd.
The reality remains that technology companies have continued to drive the global economy forward in recent years, and are expected to do so over the long-run.
As economies mature, a higher percentage of resources will continue to be devoted to technology and innovation, as countries look for competitive edges in niche sectors such as e-commerce, electronics, and artificial intelligence.
That being said, valuations are approaching very high levels, and as such, I would suggest caution for long-term investors considering jumping into technology companies which have yet to mature at this stage of the bull market.
Invest wisely, my friends.
