Since 2009, FXI has outperformed HAO on an annual basis just twice. Not to mention the small-cap ETF is home to 316 stocks, more than six times the number of FXI’s holdings. And with a price-to-earnings ratio of less than 10 at the end of last year, HAO was less expensive than U.S. small-cap benchmarks. None of that has recently lured buyers.

The nature of HAO’s recent move is such that the ETF is arguably due for a pullback, but that could also mean a buying opportunity. The A-shares rally is compelling investors on China’s mainland to flock to Hong Kong-listed fare.

“On Wednesday, Chinese investors used the entire 10.5 billion yuan ($1.69 billion) daily investment quota for buying Hong Kong stocks under the Shanghai-Hong Kong Stock Connect scheme for the first time; by Thursday morning more than 6 billion yuan ($967.26 million), over half of the daily quota, had already been” exhausted, according to Reuters.

ASHS and CNXT are A-shares ETFs, but the bulk of HAO’s holdings trade in Hong Kong. Another catalyst could lift HAO as well. When Shenzhen is added to the Shanghai-Hong Kong Stock Connect program, Hong Kong-listed small-caps will become eligible for mainland listings. That stoke a flurry of buying of HAO components. [Stock Connect Could Lift China ETFs]

Guggenheim China Small Cap Index ETF