The MSCI China Index slumped almost 5% last week, extending its July loss to 13.55% as Beijing continues its regulatory crackdown on internet companies.

In recent weeks, hundred of billions of dollars of market capitalization have evaporated at Chinese internet companies, such as Alibaba, Didi, Meituan, and Tencent, but some investors are using the calamity to embrace related exchange traded funds and that devotion could benefit products like the Invesco Golden Dragon China ETF (PGJ).

Home to nearly 100 stocks, PGJ follows the NASDAQ Golden Dragon China Index, an internet-heavy, growth-oriented collection of Chinese stocks. While funds like PGJ are enduring punishment amid Beijing regulatory efforts, data from EPFR indicate investors poured $3.6 billion into China funds during the week ending July 28, with $300 million of that sum directed to tech funds.

With some of the marquee names in the world’s second-largest economy, including some that trade in the U.S., are in regulatory crosshairs, Beijing is taking steps to allay concerns of jittery global investors.

“Chinese authorities have sought to calm markets. Late Wednesday, the securities regulator said at a virtual meeting with major investment banks that China would not ban its companies from listing in the U.S. as long as there were no national security concerns, a source familiar with the matter told CNBC,” reports Evelyn Chang for CNBC.

PGJ allocates over 78% of its weight to consumer discretionary and communication services stocks – the sectors Beijing appears to be focusing on as part of its efforts to protect consumers and potentially quash monopoly-like practices.

Elevated regulatory risk in China is a reminder that geopolitical risk is always a factor to consider when mulling emerging markets investments and, specific to China, it’s a reminder that Beijing wields a heavy hand. Still, some risk-tolerant investors may sense near-term opportunity with PGJ and some of its components.

“Geopolitical and regulatory risks could significantly discount the value of Chinese stocks compared with their U.S. peers. Alibaba Group Holding (BABA), for example, is trading at 19 times forward earnings, roughly a third of Amazon.com’s (AMZN) 55 times,” reports Evie Liu for Barron’s.

At one point last week, Alibaba was trading at share prices last seen in 2018, but its sales have roughly quadrupled since then. The e-commerce giant often called the “Amazon of China” is the third-largest holding in PGJ at a weight of 9.06%.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.