Due to the fact that it tracks an MSCI index, CN will not hold shares of the highly-anticipated Alibaba initial public offering expected later this month.
However, that does not mean CN is bereft of leverage to the Alibaba IPO or the China Internet trade. After ASHR and ASHS two of CN’s three next largest holdings are Tencent Holdings (OTC: TCEHY), China’s largest Internet company; and Baidu (NasdaqGS: BIDU), China’s largest Internet search provider.
Tencent and Baidu are up 14.3% and 28.3% over the past 90 days, indicating they have been important contributors to CN’s 13% pop over the same period. The two stocks combine for 8% of CN’s weight, according to Deutsche data.
Deutsche X-trackers Harvest MSCI All China Equity ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM.