Chinese Internet ETF aiming for another blockbuster year

The KraneShares CSI China Internet ETF (KWEB) has been roaring ahead of the year of the Tiger — amassing over $900 million over the last three weeks. KWEB underlying holdings' valuations are looking attractive to investors betting on the retreat of China's crackdown on its technology sector.

Last year, Beijing unleashed a flurry of new regulations targeting internet-oriented tech companies, private education firms and overseas listings for Chinese companies, disrupting global markets and triggering huge losses for investors. The government has cited concerns over data privacy, national security and the tech sector’s expanding influence on society as reasons for tighter oversight. The clampdown hammered China Digitalization ETFs, including KWEB — which ended the year -52% deep in the red zone.

European investors can gain exposure to the China Digitalization theme via KWEB's European doppelganger — the KraneShares CSI China Internet UCITS ETF. It has a total expense ratio of 0.75% and trades on the London Stock Exchange (KWEB/KWBE/KWBP), Euronext Amsterdam (KWEB), and Borsa Italiana (KWEB). As of January 21st, 2022, the fund's biggest names include Tencent Holding (10.6%), Meituan (8.22%), Baidu ADR (6.45%), Alibaba Group ADR (5.72%) and Pinduoduo ADR (4.55%).

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