China Internet ETF Proves Durable Amid Market Tumult

Since the start of October, the S&P 500 is down 4.1%, but Chinese stocks have quietly impressed. That scenario is not getting much attention, but the iShares China Large-Cap ETF (NYSEArca: FXI) has traded modestly higher.

Arguably more impressive has been the fortitude displayed by supposedly ultra-volatile Chinese Internet stocks.The KraneShares CSI China Internet Fund (NasdaqGM: KWEB) has also traded modestly higher this month and the strength of Chinese Internet names was on full display Wednesday when some of the ETF’s marquee holdings were able to trade higher despite one of the worst days of 2014 for U.S. stocks.

On Wednesday, shares of Chinese online retailer Vipshop Holdings (NYSE: VIPS), KWEB’s seventh-largest holding at a weight of nearly 4.1%, surged 5.1% after Deutsche Bank “reiterated a buy rating, saying, ‘Having recently finished a series of onsite visits and calls with VIPS senior mgmt, we believe the business to be trending above our expectations for 2014.’” Reports Elaine Low for Investors Business Daily.

Vipshop is up nearly 4% this month. Last week, the company announced what amounts to a 10-for-1 split of its American depositary shares. [An ETF With Glamorous Internet Stocks]

KWEB’s notoriety increased leading up to and following Alibaba’s (NYSE: BABA) September initial public offering as it was widely known that the ETF would be among the first to add the Chinese e-commerce giant. KWEB started trading with Alibaba on Oct. 3 and the stock is now the ETF’s largest holding with an allocation of nearly 10%. [China Internet ETF Adds Alibaba]

While shares of Alibaba are well off the $99.70 intraday high seen on the IPO day, the stock has jumped 3% this month. On Thursday, the company said its Alipay mobile payment service reached 190 million users.