While it is purely speculation at this point, some of the recent inflows to KWEB could be attributed to Alibaba IPO fever. Due to the company’s choice to list on the New York Stock Exchange and index restrictions surrounding the company’s decision to incorporate in the Cayman Islands, the number of potential ETF destinations for Alibaba is dwindling. [This ETF Could Hold Alibaba, When is the Question]
However, KWEB’s underlying index, the CSI Overseas China Internet Index, has the flexibility to add Alibaba after the stock’s eleventh trading day. The same goes for KWEB’s stablemate, the KraneShares CSI China Five Year Plan ETF (NYSEArca: KFYP), which is up 14% over the past three months.
While Alibaba’s exact market value is not yet known, estimates put the figure at 12 digits, implying the stock will likely enter KWEB as one of the ETFs’s largest holdings. Assuming rapid market value appreciation, Alibaba could quickly become one of the ETF’s two or three largest holdings, if not the largest. KWEB charges 0.68% per year.
KraneShares CSI China Internet Fund