ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. China Insights Channel
  2. ETF of the Week: KraneShares’ KWEB
China Insights Channel
Share

ETF of the Week: KraneShares' KWEB

Karrie GordonSep 17, 2021
2021-09-17

ETF Trends CEO Tom Lydon discussed the KraneShares CSI China Internet ETF (KWEB B) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

KWEB is the only ETF on the market that offers pure-play exposure to Chinese software and information technology stocks that are China’s answer to U.S. firms like Amazon and Facebook.

China is a country that does a tremendous amount of online shopping, with online retail sales increasing at roughly 16% a year. The number of consumers utilizing the internet in China was 854 million, but only reflects around 61% of the total population, whereas in the U.S., 294 million people had internet during the same time, an equivalent of 89% of the total population. It leaves a lot of room for growth.

“You’ve got so much more upside that we’ve seen come to fruition in the last couple of years,” Lydon said.

Recent regulations within the technology sector by China have hit the internet industry particularly hard, causing pullbacks by investors as many wait for the dust to settle. KWEB in particular has been an ETF that has been hit hard, falling below its 200 day average and declining over 30% from its April prices. At a time when most investors would have pulled back and out though, Lydon believes that it is an ETF to watch.

“If you do see potential with China growth and China internet companies, this is something to keep on your radar for sure,” he said.

It is an ETF that is worth dollar-cost averaging into as a trend follower, he explained, or is at least worth investing in once it climbs back above its 200 day average. Long term growth potential in China will only continue to increase, though, as online sales make up an enormous amount of retail sales for the Chinese economy. Lydon sees using mobile phones for online shopping with technologies similar to Amazon as the future of e-commerce.

“You’ve got a lot of great companies that are really doing fantastic as far as getting the right things to the right people at the right price, and no matter how the Chinese government feels about technology companies, or wants to get involved, the interaction between the U.S. and China is not going to be separated,” Lydon explained. These companies include major players such as Tencent, Alibaba, and JD.com.

Looking at a broader global investment strategy, at least 55% of allocations should be going to domestic investments, which leaves up to 45% allocated to overseas. Of that, Lydon believes that at least 20% should be invested in emerging markets specifically.

“You’re going to get more growth than you have in developed markets overseas, hands down,” Lydon said. On top of that, the valuations are typically 50% off in emerging markets compared to what they are in the U.S., and so taking into account the growth potential and prices, investing in these types of companies within China specifically just makes sense.

“Does that make sense to put a 5% allocation into something like this and hold it for ten years? Absolutely,” he said. Indeed, it is something that Lydon has done personally, having purchased KWEB a month previously.

Listen to the full podcast episode on KWEB:


Content continues below advertisement

This article originally appeared on ETFTrends.com

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X