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Alibaba Solid Fiscal Q3 Earnings Put These ETFs in Focus

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Chinese e-commerce giant Alibaba Group (BABA - Free Report) reported robust third-quarter fiscal 2021 results before the opening bell on Feb 2, wherein it beat earnings and revenue expectations.

Earnings of $3.38 per ADS beat the Zacks Consensus Estimate of 3.11 and increased 21% from the year-ago earnings. Revenues climbed 37% to $33.9 billion and topped the consensus mark of $32.5 billion on the back of a post-pandemic recovery in China’s economy. This represents the best revenue growth in nine quarters. The strong performance was also driven by Singles Day (11.11) — Alibaba's biggest sale of the year.

The company’s cloud computing revenues grew 50% year over year driven by robust growth in revenues from customers in the Internet and retail industries and the public sector, while the core e-commerce business rose 39%. Alibaba reported profitability for its cloud-computing business for the first time (read: China ETFs to Gain on Solid Exports Data for December).

The digital media and entertainment sector saw revenue growth of 1%. Notably, the average daily subscriber base of the streaming video business Youku increased 30% year over year.

Annual active consumers increased 22 million from the last quarter to 779. Mobile monthly active users in its China retail marketplaces increased 21 million quarter over quarter to 902 million.

ETFs in Focus

ETFs having the highest allocation to the Chinese e-commerce giant will be in focus in the days ahead. Below, we have highlighted six ETFs in detail (see: all the Technology ETFs here):

Invesco BLDRS Emerging Markets 50 ADR Index Fund (ADRE - Free Report)
 
The product offers exposure to 48 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 94.2% of the portfolio is allotted to Chinese firms, with Alibaba occupying the second position at 18.3%. Taiwan, India and Brazil round off the next three spots in terms of country exposure. Consumer discretionary, information technology, financials and communication services are the top four sectors. ADRE has amassed $210.2 million in its asset base while trading in lower volume of about 24,000 shares. It charges 30 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

iShares MSCI China ETF (MCHI - Free Report)

This ETF targets the Chinese stock market and follows the MSCI China Index. Holding 589 securities in its basket, Alibaba takes the second spot with 15.1% share. From a sector look, about 36.6% of the portfolio is allotted to consumer discretionary while communication (21.5%) and financials (12.7%) round off the next two spots. The fund has amassed $7.3 billion in its asset base while charging 59 bps in annual fees. Volume is also solid as it exchanges nearly 3.7 million shares daily on average. The ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: China ETFs Ruling 52-Week High Chart on Impressive GDP Data).

Franklin FTSE China ETF (FLCH - Free Report)

This product follows the FTSE China Capped Index, charging investors 19 bps in annual fees. It holds 866 stocks in its basket with Alibaba taking the second spot at 14.2%. Consumer discretionary, communication services and financials are the top three sectors. The ETF has amassed $114.1 million in its asset base and sees an average daily volume of 25,000 shares. It has a Zacks ETF Rank #3.

SPDR S&P China ETF (GXC - Free Report)

This product follows the S&P China BMI Index, charging investors 59 bps in annual points. It holds 805 stocks in its basket with Alibaba taking the second spot at 12.7%. From a sector look, consumer discretionary takes the largest share at 33.4%, while communication services and financials round off the next two spots. The ETF has amassed $2.1 billion in its asset base and sees an average daily volume of 81,000 shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.

MSCI Emerging Markets ESG Leaders Equity ETF (EMSG - Free Report)

This fund follows the MSCI Emerging Markets ESG Leaders Index, a capitalization-weighted index which provides exposure to companies with high Environmental, Social and Governance performance relative to their sector peers. Holding 440 stocks in its basket, Alibaba occupies the third position at 10.5% of assets. The ETF has accumulated $12.5 million in its asset base and trades in an average daily volume of 4,000 shares. It charges 20 bps in annual fees (read: 5 Emerging Market ETFs That Gained Big on Biden Inauguration).

KraneShares MSCI All China Index ETF (KALL - Free Report)

This fund offers exposure to companies based in China and listed in Mainland China, Hong Kong, and the United States. It tracks the MSCI China All Shares Index, charging 49 bps in annual fees. Holding 266 securities in its basket, Alibaba is the second firm accounting for 10.3% share. Technology and financials take the top two spots at 33.5% and 21.3%, respectively, from a sector look. The product has been able to manage $5.8 million in its asset base and trades in volume of 10,000 shares a day on average. It has a Zacks ETF Rank #3.

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