This Budget Brand Phone Won’t Be Beat

Major smartphone company Huawei, hurting from continued U.S. sanctions, has fallen by the wayside, and a new Chinese tech company is profiting in its stead. Xiaomi Corp has swept through global markets, selling the most phones worldwide in June, and looks to continue its upward movement.

Xiaomi has stepped into the gap after repeated sanctions by the U.S. have left Huawei without access to vital chips and software, such as Google, according to the Wall Street Journal.  The tech company provides phones that offer similar options to popular brands such as Apple and Samsung, but at a budget.

In June, Xiaomi sold more phones than Samsung Electronics Co, and in the second quarter replaced Apple as the world’s number two seller of phones. Europe saw the market share almost double year over year, rising 24% and claiming the top selling spot.

The company’s CEO, Lei Jun, has said that he wants to claim the second spot permanently, while aiming to replace Samsung as the world’s top smartphone seller within three years.

“We reached the top of the European market and became the number one—the first time a Chinese company has achieved this,” Mr. Lei said in Beijing earlier this month.

KFVG Invests in Xiaomi

The KraneShares CICC China 5G and Semiconductor ETF (KFVG) invests in smartphones and smartphone technology companies such as Xiaomi.

KFVG tracks the performance of the CICC China 5G and Semiconductor Leaders Index, an index that contains the top 30 Chinese companies by free-float market cap that are within the following industries: semiconductor manufacturing, manufacturing equipment and services, internet and data services, electronic equipment manufacturing, electronic components, consumer electronics, computer hardware and storage, and communications equipment and commercial electronics.

The top 30 securities have a cap of 10% of the fund, and KFVG minimizes turnover by not adding a company until it is ranked 25 or higher by Fuzzy Logic, doing business as FastINDX (the index provider), and will not be removed until they it is below 35th.

The top holdings of the fund are Xiaomi at 8.76%, Foxconn Industrial Internet at 7.18%, and Will Semiconductor at 7.08%.

KFVG has an expense ratio of 0.64% with fee waivers that end 8/1/22.

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