Buy: Invesco China Technology ETF
This ETF provides targeted exposure to Chinese companies operating specifically within the IT, communication services and tech-driven consumer sectors. The ETF acts as a strategic play on China’s push for domestic semiconductor self-sufficiency, giving investors exposure to localised hardware manufacturing alongside dominant software and internet giants. China is gaining ascendancy over the US and America’s retreat comes just as decades of state investment, industrial policy and diplomatic planning are paying off. Since the US’s imposition of tariffs in April 2025, China has extended its position as the world’s largest trading nation, achieving a record trade surplus of $1.2-trillion. The Chinese tech sector has a far lower rating than the US tech sector but is exposed to the same growth opportunities as the much higher-valued US equivalents.
Sell: Truworths International
The fashion retailer faces several persistent structural and cyclical challenges that constrain its long-term earnings growth potential. Its credit-led sales model faces increasing challenges as South African consumers remain stretched. Truworths’ aspirational middle-market positioning is also under increasing pressure from aggressive domestic discount retailers, fast-fashion digital disruptors and the advent of buy now, pay later operators. These factors are disrupting its business model, eroding its pricing power and muting local volume expansion. This is exacerbated by particularly weak womenswear and infant clothing sales, where Truworths has the greatest exposure. Office UK, which has been offsetting the weak Africa business, is starting to slow, providing a further headwind to any earnings growth.
