Buoyed by a surge in Chinese Internet stocks and the anticipation of the Alibaba initial public offering, expected later this month, the KraneShares CSI China Internet Fund (NasdaqGM: KWEB) has joined the $100 million in assets under management club.
To be precise, KWEB had $106.3 million in AUM as of Sept. 3. KWEB, which debuted in July 2013, joined the $100 million club last month amid third-quarter inflows of $25.4 million.
KWEB has surged 17.4% over the past three months, a run that has been aided by epic surges in high-flying Chinese Internet stocks ranging from Baidu (NasdaqGS: BIDU), Tencent Holdings (OTC: TCEHY) and Vipshop Holdings (NYSE: VIPS).
In a testament to the recent strength of Chinese Internet stocks, Tencent, China’s largest Internet company, is the worst performer of the aforementioned trio over the past 90 days with a gain of 15.4%. Over the same period, the First Trust Dow Jones Internet Index Fund (NYSEArca: FDN) is up 11.1%. [These ETFs Hold a VIP of Internet Stocks]
KWEB has gotten plenty of notoriety for its volatile, high-flying ways as well as likely being one of the first ETFs that will make room for Alibaba when that company delivers one of the hottest IPOs in recent memory in a few weeks.
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
