Alibaba ETFs Steady as Lockup Expires

Shares of Chinese e-commerce giant Alibaba (NYSE: BABA) are down slightly Wednesday as early investors in the company became free to sell their stakes for the first time.

Today marks the end of a six-month lock-up period for about 14 percent of the company’s publicly traded stock, report Leslie Picker and Spencer Soper for Bloomberg.

Down about 30% from the November Singles Day peak, Alibaba has shed 22.5% over the past 90 days and almost 19% this year, performances that have escalated fears that the stock and the exchange traded funds with heavy exposure to it would be vulnerable to lockup expiration. [Alibaba ETFs Survive First Lockup Expiration]

This year, some of the so-called “Alibaba ETFs” have been relatively firm in the face of the headwinds presented by the stock and that theme is continuing today. For example, the KraneShares CSI China Internet Fund (NasdaqGM: KWEB), home to an 8.5% weight to Alibaba, is trading higher today.

KWEB has traded slightly lower on a year-to-date basis, but the ETF has nimbly navigated Alibaba’s slump thanks to a combined weight of 13.5% to Alibaba rivals Vipshop Holdings (NYSE: VIPS) and JD.com (NasdaqGS: JD), two stocks that have surged this year. [China Internet ETF Staves Off Alibaba Slump]

“Alibaba has fallen through the cracks of many passive funds, largely excluded from emerging-market and in some cases even China-based index funds. That’s because shares are listed in New York, the company is incorporated in the Cayman Islands and most of its business is in mainland China. Both FTSE and MSCI have taken steps to change their methodologies for such inclusion down the road,” reports Christ Dietrich for Barron’s.