KWEB has a capping component that ensures none of its almost 25 holdings dominate the ETF. Tencent Holdings, China’s largest Internet company, and Baidu (NasdaqGM: BIDU), China’s largest Internet search firm, combine for 18.6% of the fund’s weight. Other top holdings include Ctrip.com (NasdaqGM: CTRP), Qihoo 360 (NasdaqGM: QIHU) and Sina (NasdaqGM: SINA). [KraneShares ETFs: China With a Twist]

Even if Alibaba went public tomorrow, which is not happening, Ahern pointed out that the CSI China Internet Index, KWEB’s underlying index, only includes IPOs on a semi-annual basis. If KWEB’s recent returns are any indication, the fund may not need to be in a hurry to add Alibaba.

KraneShares CSI China Internet ETF

ETF Trends editorial team contributed to this post.