Overnight, U.S. stocks saw a broad sell-off, with the Nasdaq Golden Dragon China Index closing down 2.05%. This morning (November 5), Hong Kong stocks opened lower across the board, with the Hang Seng Tech Index dropping 1.75%. Leading tech and internet stocks retreated, with Alibaba-W and Kuaishou-W falling over 2%, while Tencent Holdings and Xiaomi Group-W declined more than 1%. The HK Internet ETF (513770), heavily weighted in internet giants, saw its on-market price drop 2.57%.
Market sentiment was disrupted by bearish remarks from several international investment banks, including warnings from CEOs of Wall Street giants like Goldman Sachs and Morgan Stanley about potential market corrections, coupled with concerns over an AI investment bubble. However, analysts note that current pessimism is overdone, as this year's technological breakthroughs have not been fully reflected in stock prices. Hong Hao, Chief Investment Officer at Lianhua Asset Management, predicts that given tight liquidity conditions, the Fed is "highly likely" to cut rates by another 25 basis points in December and halt balance sheet reduction, setting the Hang Seng Index's next target above 30,000 points.
Crucially, among global tech indices, Hong Kong tech stocks are in a "valuation trough." As of October, the Hang Seng Stock Connect Internet Index's P/E (TTM) stood at 25.2x, near the 27.68% percentile over the past five years—significantly lower than the Nasdaq 100 (36.79x) and ChiNext Index (42.39x), highlighting attractive valuations and safety margins.
Looking ahead to November, China Merchants Securities believes the "15th Five-Year Plan" proposal exceeded market expectations, while easing U.S.-China tensions and reinforced Fed rate-cut expectations will shift Hong Kong stocks from "suppressed" to "rising." The AI sector is a key focus. Short-term pullbacks may offer entry opportunities. Exchange data shows the HK Internet ETF (513770) attracted nearly 500 million yuan in net inflows over four consecutive days.
The HK Internet ETF (513770) and its feeder funds (Class A 017125; Class C 017126) track the CSI Hong Kong Stock Connect Internet Index, with Alibaba-W, Tencent Holdings, and Xiaomi Group-W as its top three holdings (19.22%, 16.46%, and 10.41% weightings, respectively). The top 10 holdings—featuring AI model leaders and sectoral application giants—account for over 73%, underscoring their dominance as core Hong Kong-listed AI assets.
With assets exceeding 11.4 billion yuan and average daily turnover surpassing 600 million yuan, the HK Internet ETF (513770) supports intraday T+0 trading without QDII quota constraints, offering strong liquidity.
Caution: Recent volatility may persist, and short-term performance does not indicate future trends. Investors should assess their financial capacity and risk tolerance carefully, emphasizing position and risk management.
Data source: SSE/SZSE. The CSI Hong Kong Stock Connect Internet Index's annual returns for the past five full years: 2020 (109.31%), 2021 (-36.61%), 2022 (-23.01%), 2023 (-24.74%), and 2024 (23.04%). Index constituents are adjusted per its rules; historical performance does not guarantee future results.
Risk Disclosure: The HK Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index (base date: December 30, 2016; launch date: January 11, 2021). Constituent stocks are for reference only and do not constitute investment advice or reflect fund holdings. The fund is rated R4 (higher risk) and suits aggressive (C4+) investors. All information herein is for reference, and investors must bear responsibility for independent decisions. No liability is accepted for direct/indirect losses from using this content. Past performance of other funds managed does not guarantee future results. Invest with caution.