Investing where the future is present already

China's rise is taking place at breathtaking speed. It is not only reflected in the economic triumph of the giant empire. The immense progress in science and technology is also astounding. The news recently caused a stir that the People's Republic is leading research in 66 of 74 key technologies. This information is based on a study by the Australian Strategic Policy Institute (ASPI), an independent think tank that deals with key and future technologies.

The results of the ASPI experts could be the harbingers of an epochal change. Twenty-five years ago, the USA was still the undisputed technology leader in 90% of the specialist areas assessed. At that time, China was only a serious competitor in a few niches. The country has therefore not only caught up considerably, but has now overtaken the West by leaps and bounds. For the cited study, the ASPI analyzed thousands of scientific papers and assigned them to the country of origin of the authors. The fields considered included generative AI, cloud computing, materials research, biotechnology, robotics, geoengineering and gene coding - as well as many other future areas.

The strong performance in the Australian study is likely to have been greeted with enthusiasm in Beijing. After all, President Xi Jinping's declared aim is to lift his nation onto the winner's podium in the global race for technological leadership. The new five-year plan presented in October proves that he is serious. The strategy paper, which extends to the year 2030, focuses on technological autonomy, economic competitiveness and the green transition. To this end, technologies such as AI, semiconductors, renewable energies and energy storage are to be massively advanced and corresponding innovations promoted.

Although China is the largest growth country in the Asian region, it is not the only one that is open to new technologies. This is why disruptive forces are acting particularly quickly and strongly on the continent. Emerging economies such as South Korea, Malaysia and Singapore, with their young, tech-savvy populations, also see opportunities rather than risks in new developments. However, emerging markets are also exposed to certain risks. These include, for example, political risks such as a lack of legal certainty or economic risks such as currency fluctuations.

This development results in potentially interesting investment opportunities. However, it should be noted that past successes are no guarantee of future developments and that losses are also possible. The Vontobel Rising Economies Disruptors Index (RED) focuses specifically on the disruptive forces at work in Asian economies, above all China, and offers investors the opportunity to participate in these developments.

Specifically, the strategy invests in companies that the index sponsor Vontobel Asset Management believes will benefit from technological progress and the associated upheavals in the aforementioned regions. The focus is on Chinese and Asian companies that are driving innovation, offering disruptive products or using disruptive technologies in their business models. Basically, the areas in which such advances are taking place can be divided into four categories: Enabling Technologies, Automation, Healthcare Technology and Consumer Technology (see figure).

In recent years, China has become one of the leading countries in numerous technology areas and has achieved a leading global position.

The People's Republic occupies a leading position worldwide in the field of electromobility. The country is by far the largest market for electric vehicles (EVs) and plug-in hybrids, both in terms of production and sales. Chinese companies such as BYD and Geely are among the most important manufacturers of electric cars. They are also investing heavily in research and development, in infrastructure such as charging stations and in battery technologies. In 2024, 10.8 million electric vehicles were sold in China. This corresponds to two thirds of all e-cars sold worldwide. The momentum has thus increased once again compared to the previous year: up 48 percent. The share of electric vehicles in sales has risen to 47%, significantly exceeding the 20% share of electric vehicles in Germany.

China was and is a pioneer in the development and introduction of 5G mobile networks. The country has one of the largest 5G networks in the world with around 4.7 million base stations. At the same time, with over one billion active 5G users, China is the world's leading market in terms of network size and number of users. The Far Eastern country is also leading the way in the development of the next 6G standard and is driving research forward. According to press reports, the People's Republic is the leader in 6G patent applications and holds a very large share of the global patent portfolio for 6G with more than 40 percent. For example, field trials with extremely high speeds of more than 200 Gbit/s have already been carried out in China. The country is therefore clearly positioning itself as a driving force in defining and implementing the next generation of mobile technology.

China is investing billions in the field of artificial intelligence. Local companies such as Baidu, Alibaba and Tencent are among the leading players in the development of AI applications, for example in the areas of speech recognition, image analysis and autonomous driving. In spring 2025, the generative AI DeepSeek made headlines. The Chinese counterpart to ChatGPT offers comparable performance to leading models from the West, but at significantly lower training costs. DeepSeek is now more than just a start-up: it is regarded as China's strategic AI project with rapid technical progress, high public visibility, the involvement of major Chinese industrial groups and enormous global attention.

The list goes on and on. China is the world's largest e-commerce market. In 2024, around 50 percent of all global online purchases were made there. Platforms such as Alibaba dominate the market. China is also a leader in mobile payment: more than 90% of internet users here use digital payment services such as Alipay or WeChat Pay. China is also the largest manufacturer and installer of photovoltaic and wind power systems. In 2024, more than 50 percent of the world's newly installed photovoltaic capacity was built in the People's Republic. China also has several of the fastest supercomputers. In the field of quantum communication, the Middle Kingdom established the first such network with the "Micius" satellite launched into space in 2016, setting a technological milestone. Last but not least, China has been the largest market for industrial robots for many years, making it the key driver of global automation. In 2024, around 295,000 industrial robots were installed, which corresponds to around 54% of all newly installed robots worldwide.

The selection process for the Vontobel Rising Economies Disruptors Index comprises several steps, including the screening of potential members based on qualitative and quantitative criteria. Finally, up to 50 stocks are selected from the relevant thematic areas that the index sponsor considers to be the most attractive for the strategy. The wide discretionary scope of the responsible specialists should be emphasized. Within the framework of the strategy, they not only decide on the respective index components, but also on their weighting. In addition, Vontobel Asset Management has the discretion to decide when and what changes to make to the index composition. These points ensure that the index is always optimally tailored to the strategy.

an open-end tracker certificate allows investors to participate in the performance of the Vontobel Rising Economies Disruptors Index on a one-to-one basis and without a time limit.