Global X China Tech ETF (ASX: DRGN)

The Global X China Tech ETF (DRGN) provides targeted access to twenty leading technology innovators across China’s A-share and H-share markets. As the Chinese digital economy is projected to exceed 55% of GDP by 2030, this fund captures the strategic shift from internet platforms toward advanced manufacturing, robotics, and artificial intelligence.

By tracking the Global X China Tech 20 Index, the fund employs a rigorous rules-based selection process that filters for market capitalisation, liquidity, and fundamental strength, including earnings growth and free cash flow yield.

This methodology ensures exposure to high-quality, cash-generating companies aligned with national policy priorities in semiconductors and industrial software. With an 8% individual stock cap to manage concentration risk, DRGN serves as a differentiated entry point for investors seeking to benefit from China’s structural transformation and its expanding global footprint in cost-efficient AI and automated industries.

The Global X China Tech ETF (DRGN) offers access to the 20 leading technology companies across China’s A and H share markets. With a rules-based selection process across 11 core sectors including semiconductors, robotics, software, and internet platforms, DRGN captures China’s strategic push into self-sufficient innovation.

This fund includes exposure to sectors aligned with China’s innovation roadmap and focuses on firms with strong revenue, profit, and cash flow metrics ensuring investors gain access to high-quality growth names driving China’s tech evolution.

The Global X China Tech 20 Index is designed to track the performance of 20 leading technology companies listed in Mainland China and Hong Kong. The index selects across 15 innovation-linked sectors, including semiconductors, automation, industrial software, and internet platforms. Eligible companies are screened using a rules-based methodology that incorporates market capitalisation, trading liquidity, one-year sales and earnings growth, and free cash flow yield. Constituents are market cap weighted with an 8 percent cap to manage concentration risk. The index is rebalanced quarterly.

China’s digital economy is projected to exceed 55% of GDP by 2030, transforming productivity across every layer of industry and becoming a structural growth driver, not just a tech segment¹.

Inference costs for large AI models in China are more than 90% lower than in the US, creating a commercial advantage that accelerates enterprise adoption and monetisation at scale².

Policy support for semiconductors, robotics, and AI is now directly tied to deployment, productivity, and GDP contribution, with commercialisation targets replacing vague R&D goals³.

China accounted for over 60 percent of global EV sales in 2024 and holds around 30 percent of the global industrial robotics market, underscoring its expanding global footprint in innovation-heavy sectors⁴.

¹ China Daily, 30 March 2025, Digital economy to take 55% share of GDP by 2025
² Forbes, 13 March 2025, Big AI Inference Has Become A Big Deal And A Bigger Business
³ Yichai Global, 4 March 2025, Beijing Sets Up USD13.7 Billion
⁴ Visual Capitalist, Statzon, International Federation of Robotics

A strategic allocation for investors seeking exposure to China’s domestic innovation push, as the country shifts from platform dominance to advanced manufacturing, robotics, and AI commercialisation.

A complementary position alongside global tech or EM strategies that may underrepresent A-share or industrial tech exposure, helping broaden the scope beyond familiar mega-caps.

A differentiated entry point into China’s structural tech transformation, targeting sectors aligned with government priorities and supported by rising capital expenditure in digital infrastructure, automation, and smart industry.

Tracks the Global X China Tech 20 Index, which selects 20 leading A-share and H-share companies from China’s three major exchanges including Hong Kong, Shanghai, and Shenzhen across 11 technology-related sectors.

The index applies a rules-based filter combining market capitalisation, trading liquidity, 1-year sales growth, 1-year earnings per share growth, and free cash flow yield. This helps ensure the portfolio captures scalable, cash-generating innovators with real momentum.

The final portfolio consists of 10 A-shares and 10 H-shares, market-cap weighted with an 8% stock cap to balance exposure across names. This structure reflects the diversity of China’s tech landscape while managing concentration risk.

Geopolitical and Regulatory Sensitivity: Chinese technology companies remain subject to both global trade tensions and domestic policy changes, which can introduce periods of volatility and impact market sentiment.

Sector and Style Exposure: The fund is focused on China’s innovation economy, with exposure to sectors like industrial technology, automation, semiconductors, and software. This positioning means it may potentially behave differently from key China benchmarks during certain market cycles.

Index Design: The strategy uses fundamental and momentum filters to avoid persistently unprofitable or speculative companies. However, innovation timing can vary, and the theme may require patience as policy tailwinds and commercial adoption evolve.

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Global X Management (AUS) Limited (“Global X”) (Australian Financial Services Licence Number 466778, ACN 150 433 828) is the product issuer. Offers of interests in any retail product will only be made in, or accompanied by, a Product Disclosure Statement (PDS). In respect of each retail product, Global X has prepared a target market determination (TMD). Each PDS and TMD is available at www.globalxetfs.com.au. The information on this website is general in nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information, you should consider the appropriateness of the information having regard to your objectives, financial situation or needs and consider seeking independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Any investment decision should only be made after obtaining and considering the relevant PDS and TMD. Investments in any product issued by Global X are subject to investment risk, including possible delays in repayment and loss of income and principal invested .The value or return of an investment will fluctuate and an investor may lose some or all of their investment. Past performance is not a reliable indicator of future performance.

Information current as at May 2025.