ETFs To Tap Alibaba's Stunning Hong Kong Debut

Chinese e-commerce giant Alibaba Group (BABA - Free Report) made a blockbuster Hong Kong debut with the share price popping up more than 8% in the early trading hours. If the gains continue, it will be among the best first-day performances involving the biggest IPOs in the city since 2005, after AIA Group (17.1%), Bank of China (15.3%), Industrial and Commercial Bank of China (14.7%) and China Unicom (8.9%).

Asia’s most-valuable company raised $11.3 billion through the company’s secondary listing by pricing 500 million shares at HK$176 each. The amount could rise to $12.9 billion if an over-allotment option is exercised. The listing represents the biggest IPO globally this year and the largest in Hong Kong in nearly a decade.

The move will give Alibaba fresh capital for some of its newer businesses such as food delivery and physical retailing. The impressive homecoming debut by the Chinese Internet giant fueled confidence among investors’ and Hong Kong’s reputation internationally as a financial hub, which has been hindered by long-running anti-government protests in the city. The listing in mainland China will now allow Chinese investors to buy and sell Alibaba shares easily at home amid rising trade tensions.

ETFs to Tap

Investors seeking to capitalize on the stunning Hong Kong debut of the Chinese e-commerce giant could consider from the list of the following ETFs:

Invesco BLDRS Emerging Markets 50 ADR Index Fund (ADRE - Free Report)
 
The product offers exposure to 50 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 43.3% of the portfolio is allotted to Chinese firms with Alibaba occupying the top position at 21.4%. Taiwan, Brazil, and India round off the next three spots in terms of country exposure. ADRE has amassed $178.8 million in its asset base while trading in a light volume of about 5,000 shares. It charges 18 bps in fees per year and has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.

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