Peer-Beating Tech Fund Doubles China Exposure in Contrarian Bet

The T. Rowe Price Science & Technology Fund increased its China allocation by 10% in the first quarter of 2024, a move that contrasts with many other technology funds. This strategic shift, detailed in a recent investor letter, sees the fund reducing its holdings in U.S. semiconductor stocks like Nvidia, which had previously driven significant gains. The fund's manager, Joseph T. Kenney, stated in the letter that the team is "taking some profits" from these U.S. positions to reinvest in Chinese technology companies. Kenney highlighted specific areas of interest within China, including internet platforms and hardware manufacturers, believing these sectors offer compelling valuations and growth potential. The fund's exposure to China now stands at approximately 20% of its portfolio, a substantial increase from previous levels. This contrarian bet comes as many investors remain cautious about Chinese technology stocks due to regulatory uncertainties and geopolitical tensions. However, Kenney expressed optimism about the long-term prospects for Chinese tech, citing innovation and market resilience. The fund aims to leverage these opportunities to continue its outperformance, having delivered strong returns in recent periods.