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China Internet ETF Celebrates Five-Year Track Record

This article was originally published on ETFTrends.com.

The KraneShares CSI China Internet ETF (KWEB) , one of the first exchange traded funds to focus on Internet stocks in an emerging market, now has a five-year performance record for investors to consider.

The $1.18 billion KWEB debuted on July 31, 2013. KWEB tracks the CSI Overseas China Internet Index and was home to 43 stocks at the end of the second quarter.

The fund “achieved an annualized five year return of 18.14% and a cumulative five year return of 130.26% as of July 31, 2018. During the same time period the S&P 500 Index returned 13.11% annualized and 85.18% cumulative,” according to a statement from KraneShares.

Based purely on sheer size, China’s Internet and mobile phone markets are substantially larger than those in the U.S. Additionally, brick-and-mortar infrastructure is slack in China, a sign that up-and-coming Chinese consumers are adept at and prefer to buy online.

Emerging market investors are also focusing on the boom in consumer spending and technological growth. That theme could be a boon for KWEB, which is home to such well-known Chinese stocks as Tencent, Alibaba (BABA), Baidu (BIDU) and JD.com (JD), among others.

Related: China ETFs Surge Following Back-to-Back Selling

Major Milestones for China

“Over the past five years the China internet sector has achieved many significant milestones. In 2013 E-Commerce sales in China reached $296.57 billion surpassing E-Commerce sales in the United States of $262.51 billion for the first time,” said KraneShares. “By the end of 2017, China's annual E-Commerce sales had nearly quadrupled to $1.14 trillion compared to $453.5 billion in the United States. The current percent of China's population with internet access is only 52.2% compared to 88.5% in the United States, indicating there is significant room for growth in China's internet sector.”

Over its five years on the market, KWEB is the best-performing China ETF listed in the U.S., according to Bloomberg data. During that span, KWEB is also the top performer among China region mutual funds with track records of at least five years, according to Morningstar.

KWEB charges 0.72% per year, or $72 on a $10,000 investment.

For more information on the Chinese markets, visit our China category.

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