I am of the opinion that at this point in time, technology companies in North America are simply far too overvalued to consider, relative to global counterparts. Gaining exposure to global technology companies, however, is the difficult part.
One exchange traded fund (ETF) which holds some of the best technology companies from around the world is the MSCI Emerging Market ETF (TSX:XEC). This ETF is focused primarily on Asia, with some of the biggest and best technology companies headlining this ETF.
As with many other markets around the world, technology continues to encompass a growing percentage of emerging market indices, making emerging markets the place value investors have headed for lower valuations and higher expected upside (on a risk adjusted basis) over time.
Certainly, an argument could be made that investing closer to home is a more prudent exercise, given the advantage we have of using many of the products companies traded on North American exchanges provide. The risk profile with emerging market technology companies can, at first glance, seem much higher than what reality tells us.For those looking for relative value, and the potential for long-term outperformance from a growth perspective, I would focus my energy on emerging market ETFs such as XEC.
Invest wisely, my friends.
