Shares of Chinese e-commerce giant Alibaba (NYSE: BABA) are down slightly Wednesday as early investors in the company became free to sell their stakes for the first time.
Today marks the end of a six-month lock-up period for about 14 percent of the company’s publicly traded stock, report Leslie Picker and Spencer Soper for Bloomberg.
Down about 30% from the November Singles Day peak, Alibaba has shed 22.5% over the past 90 days and almost 19% this year, performances that have escalated fears that the stock and the exchange traded funds with heavy exposure to it would be vulnerable to lockup expiration. [Alibaba ETFs Survive First Lockup Expiration]
This year, some of the so-called “Alibaba ETFs” have been relatively firm in the face of the headwinds presented by the stock and that theme is continuing today. For example, the KraneShares CSI China Internet Fund (NasdaqGM: KWEB), home to an 8.5% weight to Alibaba, is trading higher today.
KWEB has traded slightly lower on a year-to-date basis, but the ETF has nimbly navigated Alibaba’s slump thanks to a combined weight of 13.5% to Alibaba rivals Vipshop Holdings (NYSE: VIPS) and JD.com (NasdaqGS: JD), two stocks that have surged this year. [China Internet ETF Staves Off Alibaba Slump]
“Alibaba has fallen through the cracks of many passive funds, largely excluded from emerging-market and in some cases even China-based index funds. That’s because shares are listed in New York, the company is incorporated in the Cayman Islands and most of its business is in mainland China. Both FTSE and MSCI have taken steps to change their methodologies for such inclusion down the road,” reports Christ Dietrich for Barron’s.
Until those big index providers officially accommodate Alibaba, ETF investors are left to access the stock via funds such as KWEB and the Renaissance IPO ETF (NYSEArca: IPO). IPO, which was the second ETF to add Alibaba following the company’s September initial public offering, currently has a 7% weight to the stock.
IPO is up 0.1% today, extending a run that has seen the ETF climb 6.4% this year. That run has been buoyed by, among other holdings, Zoetis (NYSE: ZTS), Twitter (NYSE: TWTR) and JD.com. [IPO ETF Holding up Nicely]
TheEmerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ), which debuted in November, is trading slightly lower today. The ETF’s underlying index, the Emerging Markets Internet & Ecommerce Index, has an 8% weight to Alibaba.
Although it is not a dedicated China Internet ETF, EMQQ does feature significant allocations to some of the Chinese Internet names that have endured Alibaba’s slide, including a combined 11.5% weight to JD.com and Vipshop.
KraneShares CSI China Internet Fund