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5 China ETFs to Mingle With on Singles' Day

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Singles’ Day is now considered the world’s largest shopping festival with e-commerce players making quick bucks on the back of heavy discounts and promotions on everything from daily necessities to luxury items and even apartments.

Notably, sales on 11.11 are traditionally higher than U.S. Black Friday and Cyber Monday combined. Last year, total sales climbed 24.6% to hit a record $38.4 billion on Singles Day, compared to $9.4 billion in sales on Cyber Monday and $7.4 billion on Black Friday.

The mega shopping event has started early this year with the start of November mainly to take advantage of the COVID-19 pandemic, which has brought more shoppers online. A recent survey by management consulting firm Oliver Wyman showed that about 86% of consumers plan to spend more during this year’s Singles’ Day festival than last year as shoppers in China "continue to spend like crazy.”

While several Chinese e-commerce platforms as well as U.S. brick and mortar retailers participate in this online shopping festival, Alibaba (BABA - Free Report) continues to dominate. The Chinese e-commerce giant, which had turned this day into the biggest 24-hour spending blitz worldwide, raked in a record-breaking $56 billion in sales in the first 30 minutes. This is much higher than the last year’s total of $38 billion in the entire 24-hour period and dwarfs the record $10.4 billion spent during Amazon’s (AMZN - Free Report) two-day Prime Day event last month (read: ETFs in Focus on Alibaba's Strong Fiscal Q2 Earnings).

Meanwhile, JD.com (JD - Free Report) said transaction volume on its platform was 200 billion yuan as of 12:09 a.m. Beijing time since Nov 1. The second-largest e-commerce Chinese giant company is offering 50% discount on more than 200 million commodities, launching more than 300 million new products and giving subsidies and consumption coupons worth more than 20 billion yuan ($3 billion) during this year's Singles Day shopping carnival.

Other e-commerce firms like Baidu (BIDU - Free Report) , Tencent Holdings TCEHY, Pinduoduo (PDD - Free Report) and Vipshop (VIPS - Free Report) are also offering huge discounts to entice buyers to spend on their platforms.

How to Play

E-commerce players have a tradition of enjoying a huge rally on the Singles Day shopping fervor. As such, investors seeking to tap the shopping benefits in a diversified way should focus on the following five ETFs that provide substantial exposure to the Chinese e-commerce segment.

KraneShares CSI China Internet Fund (KWEB - Free Report)

This product provides concentrated exposure to the Chinese Internet market by tracking the CSI China Overseas Internet Index. In total, the fund holds 32 securities in its basket with Alibaba, Tencent, Pinduoduo and JD.com being among the top five firms with a combined 32% share. The ETF has amassed $3.9 billion in its asset base and charges 73 bps in annual fees from investors. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: ETFs That Gained the Most in One of Best Post-Election Rallies).

Emerging Markets Internet & Ecommerce ETF (EMQQ - Free Report)

This ETF targets the Internet and ecommerce sectors of the developing world by tracking the Emerging Markets Internet & Ecommerce Index. Holding 86 securities in the basket, Alibaba, Tencent, Pinduoduo and JD.com are among the top 10 firms that collectively make up for 25.8% share. The product has accumulated $1.2 billion in its asset base and charges 86 bps in annual fees. It has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook but could get a boost from the Singles Day shopping blitz.

UP Fintech China-U.S. Internet Titans ETF

With AUM of $18.3 million, this ETF offers concentrated exposure of the top 20 prominent Chinese and U.S. Internet companies by tracking the Nasdaq China US Internet Tiger Index. Tencent, Alibaba and Vipshop are among the top 10 firms and make up for a combined 20.5% share. TTTN charges 59 bps in annual fees from investors.

Global X MSCI China Consumer Discretionary ETF (CHIQ - Free Report)

This product offers exposure to the consumer discretionary sector in China by tracking the MSCI China Consumer Discretionary 10/50 Index. Holding 69 securities in its basket, JD.com, Alibaba, and Pinduoduo are among the top 10 firms with a combined 19% share. The fund has AUM of $449.3 million and charges 65 bps in annual fees. It has a Zacks ETF Rank #3 with a Medium risk outlook (read: Best & Worst ETFs of October).

Invesco China Technology ETF (CQQQ - Free Report)

This fund targets the overall information technology sector in China and follows the FTSE China Incl A 25% Technology Capped Index. It holds 100 stocks in its basket with Tencent and Baidu among the top three firms accounting for a combined 17.7% share. The product manages an asset base of $1.1 billion while charges 70 bps in fees per year. It has a Zacks ETF Rank #4 with a High risk outlook.

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