With the decisions to list on the NYSE and incorporate in the Caymans, Alibaba has significantly reduced the number of ETFs for which it is eligible. With the decision to list on the NYSE, Alibaba has also rendered itself ineligible for inclusion in the PowerShares QQQ (NasdaqGM: QQQ). QQQ, the NASDAQ-100 tracking ETF, is the fifth-largest U.S. ETF. [Alibaba’s Exchange Choice Limits ETF Options]
Had Alibaba listed on the Nasdaq, the only way investors in mainland China would have been able to access the stock is through Guotai NASDAQ-100 Exchange Traded Fund, which launched last year on the Shanghai Stock Exchange. Now that option is off the table for investors on China’s mainland.
The most likely immediate ETF destinations for Alibaba appear to be the Renaissance IPO ETF (NYSEArca: IPO), which could add the stock after its fifth day of trading, and the KraneShares CSI China Internet Fund (NYSEArca: KWEB). KraneShares has previously said KWEB could add Alibaba after the stock’s eleventh trading day. Bottom line: PGJ could eventually hold Alibaba with “eventually” being the operative word.
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