Affected by the overnight decline in U.S. tech stocks, Hong Kong stocks opened lower again on December 18, with the Hang Seng Tech Index dropping over 1%. Most leading tech and internet stocks retreated. As of press time, Xiaomi Group-W fell 3%, while Alibaba-W and Kuaishou-W declined over 1%. Tencent Holdings and Meituan-W also followed the downtrend.
The HK Internet ETF (513770), heavily weighted in internet leaders, saw its on-market price drop 0.95%, with persistent wide premiums during trading, indicating active buying interest. Data from the Shanghai Stock Exchange shows the ETF has attracted net inflows exceeding 1.1 billion yuan over the past 10 consecutive days.
Analysts suggest the recent volatility in Hong Kong stocks stems from multiple factors, including overseas liquidity concerns, year-end profit-taking, slower southbound capital inflows, and a December peak in share lock-up expirations. The market is searching for direction amid fluctuations.
As tech leaders continue to correct, institutions generally hold a positive outlook for a post-year recovery in Hong Kong stocks, highlighting current left-side positioning opportunities. Galaxy Securities noted that a loose liquidity environment and policy tailwinds could drive a rebound in Hong Kong stocks. The tech sector remains a long-term investment focus, with valuations having retreated after earlier adjustments, poised for recovery under multiple favorable catalysts.
Industrial Securities predicts the 2026 AI wave will benefit from Fed rate cuts, with bubble concerns potentially driving differentiation and value realization. The Hong Kong bull market is expected to persist, with significant potential for earnings and valuation expansion, particularly in large-cap growth and dividend assets.
The HK Internet ETF (513770) and its feeder funds (Class A 017125; Class C 017126) passively track the CSI Hong Kong Stock Connect Internet Index, heavily weighted in Alibaba-W, Tencent Holdings, and Xiaomi Group-W. The top 10 holdings, accounting for over 73% of the portfolio, include AI cloud computing, large-model, and AI application companies, showcasing strong leadership advantages. The ETF, with assets exceeding 10 billion yuan, averages daily turnover of over 600 million yuan, supports intraday T+0 trading, and is not subject to QDII quota restrictions, ensuring strong liquidity.
For investors bullish on Hong Kong tech but seeking lower volatility, the Hong Kong Large-Cap 30 ETF (520560) offers a "tech + dividend" barbell strategy, combining high-growth tech stocks like Alibaba and Tencent with stable high-dividend plays such as China Construction Bank and Ping An Insurance, making it an ideal long-term allocation tool.
Caution: Recent market volatility may remain elevated, and short-term performance does not indicate future trends. Investors should assess their financial situation and risk tolerance carefully, emphasizing position and risk management.
Data source: SSE, SZSE, etc. The CSI Hong Kong Stock Connect Internet Index recorded annual returns of 109.31% (2020), -36.61% (2021), -23.01% (2022), -24.74% (2023), and 23.04% (2024). Index constituents are adjusted per its rules, and past performance does not guarantee future results.
Risk Disclosure: The HK Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index (base date: 2016.12.30; launch date: 2021.1.11). Constituents are adjusted per index rules. Stock mentions are for illustrative purposes only and do not constitute investment advice or reflect fund holdings. The fund is rated R4 (medium-high risk), suitable for aggressive (C4) or higher investors. All information herein is for reference only, and investors bear full responsibility for their decisions. Past performance of other funds managed by the manager does not guarantee future results. Investment involves risks.