On March 17, Hong Kong stocks continued their upward trajectory, with a V-shaped rebound capturing significant attention in the capital markets. After a five-month correction, the Hang Seng Tech Index and other sectors have shown notable strength since last week. In particular, technology sub-sectors such as automotive, semiconductors, internet, and biotech have outperformed.

Analysts attribute the bullish outlook for Hong Kong tech stocks to factors including ample market adjustments, strong capital inflows, and attractive valuations. The recent V-shaped recovery has made Hong Kong Stock Connect ETFs highly sought-after by investors. These ETFs generally support T+0 trading, offer diverse thematic exposures, and include unique products that are often the first of their kind in the market.

A closer look at Hong Kong's tech sector reveals a strong focus on AI, covering the entire industry chain from computing power and large language models to applications. Key ETFs in this space include the Hong Kong Information Technology ETF (159131), which tracks the CSI Hong Kong Stock Connect Information Technology Composite Index. This ETF invests in 45 hard-tech companies such as SMIC and Hua Hong Semiconductor, with a composition of roughly 70% hardware and 30% software. Notably, the index excludes large-cap internet firms like Alibaba, Tencent, and Meituan, offering sharper exposure to AI and hardware trends.

Further down the AI value chain, ETFs targeting large models and applications—such as the Hong Kong Internet ETF (513770), Hong Kong Auto ETF (520780), Hong Kong Innovative Medicine ETF (520880), and Hong Kong Healthcare ETF (159137)—are positioned to capture growth. The Hong Kong Internet ETF (513770), for instance, concentrates on leading internet companies, with top holdings including Alibaba-W, Tencent, Xiaomi, Kuaishou, and Bilibili. As of March 16, 2026, this ETF had assets under management exceeding RMB 11.9 billion and strong liquidity.

The Hong Kong Innovative Medicine ETF (520880), which focuses on "AI + healthcare," is the first ETF tracking the Hang Seng Hong Kong Stock Connect Innovative Medicine Index. A recent rebalancing expanded its constituents to 50 stocks, adding companies from AI-driven drug discovery, gene editing, and advanced therapeutics. Similarly, the Hong Kong Auto ETF (520780) offers exposure to leading automakers like XPeng, BYD, Geely, and Li Auto through the CSI Hong Kong Stock Connect Auto Industry Theme Index. The auto sector has been a standout performer in the recent rebound.

The Hong Kong Healthcare ETF (159137) provides broad coverage of CXO, medical services, devices, and biopharma, with over 80% of its weight in leading companies. More than 85% of its holdings are exclusive to the Hong Kong market, making it an efficient tool for "AI + healthcare" investment.

These Hong Kong Stock Connect ETFs benefit from T+0 settlement, enhancing liquidity and trading efficiency—particularly for cross-border and thematic strategies. Recent external catalysts include returning Middle Eastern investors and bullish comments from noted short-seller Michael Burry, who highlighted the historic opportunity in Hang Seng Tech due to valuation and fundamental disparities.

Citing sustained global liquidity and improving market conditions, Industrial Securities suggested that 2026 may see increased foreign inflows into Hong Kong stocks, with tech assets poised to benefit from AI advancements. In 2025, southbound capital set a record with net inflows of HKD 1.404844 trillion. As of March 17, 2026, year-to-date southbound inflows already totaled HKD 191.161 billion.

All signs indicate that Hong Kong tech ETFs may play a critical role in investment portfolios in 2026. Investors are reminded that market volatility may persist, and short-term performance is not indicative of future returns. Careful consideration of personal financial circumstances and risk tolerance is advised.

Data sources: Shanghai & Shenzhen Stock Exchanges, CSI Index Co., S&P Index Co., Wind. Index performance and constituent information are for reference only and do not guarantee future returns. All products are issued and managed by China Resources Fund Management. Investors should review fund documents and assess risk compatibility before investing. ETF performance depends on index movements, and past results are not indicative of future performance. Fund risk levels vary; investors should match products with their risk profile. Regulatory approval does not imply endorsement of fund value or returns.