Despite an up and down last few months, China remains a key market to consider for investors. U.S. investors especially may benefit from diversifying away from an expensive, top-heavy S&P 500, for example. Recent news about electric car sales, a relative positive in China this year, may intrigue investors thinking about a China ETF. A pair of China ETFs, particularly, could play both ends of that trend to the benefit of portfolios.
The news came in in the last few days that China e-commerce giant JD.com (JD) looks likely to start selling cars soon. The car sales will likely focus on electric vehicles, particularly. Per the report, JD.com would allow consumers to put deposits down on new Tesla (TSLA) models, for example. EV sales in China neared 7 million units in 2022, a 93.4% increase compared to 2021. It remains a strong positive in China’s overall market and economy.
Should those electric vehicle sales continue their momentum, it could benefit a China ETF duo focused on cars and online sales. The KraneShares Electric Vehicles & Future Mobility Index ETF (KARS) and the KraneShares CSI China Internet ETF (KWEB) present an intriguing pair to watch. KARS tracks the Bloomberg Electric Vehicles Index, while the KraneShares CSI China Internet ETF tracks the CSI Overseas China Internet index.
China ETF Duo to Watch
KWEB does hold JD.com in its holdings. It charges a 69 basis point (bps) fee to offer “pure play” exposure to Chinese software and info tech stocks. KWEB has seen its AUM rise more than $160 million over the last year, offering a play as well on e-commerce in China too.
KARS, meanwhile, charges a 72 basis point (bps) fee to track the Bloomberg Electric Vehicles Index. KARS’ index is market-weighted, deriving significant revenues from EVs, energy storage, and fuel cell development work like mining and manufacturing. The ETF holds Chinese companies as well as international firms like TSLA.
Both strategies present interesting thematic takes on China. Should investors want to take a look at a China ETF to benefit from the JD.com news, KARS and KWEB could appeal.
For more news, information, and analysis, visit the China Insights Channel.