HK and US Internet Technology ETF: An Investment Tool to Seize the Frontier of Technology

In the global financial market, the internet industry has attracted the attention of many investors with its high growth and innovation potential. In order to facilitate investors in seizing opportunities in this field, various exchange-traded funds (ETFs) specifically targeting the internet technology industry have emerged in the US and Hong Kong stock markets.

This article will introduce some investable ETF products related to the internet industry that are listed in the US and Hong Kong stock markets, in order to help readers better understand their investment value and characteristics and make investment choices.

Before that, we should have a clear understanding of the key factors to focus on when selecting ETFs:

1. Determine your investment goals and strategies: whether it is long-term appreciation, stable returns or high growth; whether you are a risk lover or a risk avoider.

2. Understand the assets that the ETF tracks: judge whether the index can reflect the market or industry sector you want to invest in. For example, if you want to invest in Chinese internet companies, you need to look for ETFs that track the corresponding internet index.

3. Understand the expense ratio of the ETF: the operating cost of the ETF will be reflected in its expense ratio, and a lower ratio means a higher net return rate. Among products of the same type, you should choose ETFs with lower fees as much as possible.

4. Understand the size and liquidity of the ETF: ETFs with larger scale usually have better liquidity and smaller bid-ask spreads, which are beneficial for investors to quickly enter and exit the market without incurring excessive impact costs. We can judge the liquidity situation through the average daily trading volume and market value scale.

5. Understand the constituents and weights of the ETF: we can evaluate the risk diversification and industry concentration of its investment portfolio by analyzing the constituents and weights of the ETF.

In short, selecting ETFs is a process of comprehensively considering multiple factors. After fully understanding the product characteristics, readers should make wise choices based on their own risk preferences and investment horizons.

Next, we will select several ETF products with large market scale and high trading volume to introduce their characteristics.

This fund tracks the Dow Jones Internet Composite Index. This index aims to measure the performance of the largest and most actively traded stocks in the internet industry in the US market, consisting of two sub-indices: Dow Jones Internet Commerce Index and Dow Jones Internet Services Index. Stocks must meet the following criteria: 1) generating the majority of sales revenue from the internet; 2) having at least three months of trading history; 3) having a minimum three-month average float-adjusted market value of $100 million. Looking at the top ten holdings of the fund, it includes well-known internet companies such as Amazon, Meta, and Google.

This ETF has an asset size of approximately $6.4 billion and a daily average trading volume of over 60 million, favored by investors who are confident in the overall development trend of the internet industry. From January 2023 to now, FDN has risen by about 66.89%. The industry as a whole has both traffic value and conversion value, which has long-term value for investors to pay attention to.

PNQI holds stocks of US-listed internet companies and tracks the NASDAQ CTA Internet IndexSM, which includes international company stocks listed on US exchanges, such as Chinese internet giants Alibaba (ABAB), Baidu (BIDU), and JD.com (JD). Compared to FDN, which mainly focuses on internet companies in the US market, PNQI's investment targets cover the global internet industry. Both of them primarily passively track indices, but PNQI's coverage is relatively wider.

The asset size of PNQI is approximately $769 million, with a daily average trading volume of about 64,000. From January 2023 to now, it has grown by about 77.98%. With the overall development of the global internet technology field, this ETF also has a considerable profit potential.

KWEB tracks the CSI Overseas China Internet Index, which selects a basket of Chinese internet companies listed on overseas exchanges as samples. Investors can achieve diversified investment in these Chinese internet companies by purchasing shares of KWEB. The main holdings include well-known companies listed in Hong Kong and the US, such as Tencent, Alibaba, Pinduoduo, Meituan, and others.

KWEB tracks the performance of the Chinese internet industry. Due to the significant impact of macroeconomic environment, Sino-US relations, and industry regulatory policies on the performance of Chinese internet companies in the international capital market, the industry has relatively high volatility. Since reaching a high point in early 2023, it has fallen by about 10.3%. The asset size of this ETF is approximately $5.423 billion, with a daily average trading volume of 18 million, and its market performance is relatively active.

This ETF focuses on investing in companies that use disruptive innovation to drive economic growth, with a focus on areas such as biotechnology, robotics technology, and artificial intelligence. It is the flagship fund managed by the 'Queen of Investment' Cathie Wood. ARKK's investment team uses a unique research method to identify technology-driven companies that have the potential to change the world. This active management approach allows ARKK to search for potential companies in constantly evolving innovative fields, rather than simply replicating an index. The top ten holdings include internet-related growth companies such as Coinbase (cryptocurrency exchange), Roku (streaming media), and Zoom (video communication).

However, this active management approach also means that ARKK's performance may differ significantly from the S&P 500 index or other market benchmarks. At the same time, because its investment portfolio contains a large number of innovative companies, these companies may exhibit high volatility in the short term, making it more suitable for aggressive investors who can withstand certain market fluctuations and seek higher returns.

This ETF tracks the 'Indxx Global Robotics and Artificial Intelligence Thematic Index'. The index aims to track the performance of listed companies worldwide that focus on robotics technology and AI-related businesses. This index typically selects companies with significant business activities and prospects in areas such as robot manufacturing, automation solutions, AI software and services, and so on as its constituent stocks.

The ETF mainly holds shares of technology companies such as Nvidia and Intuitive Surgical, with Nvidia being its largest holding. AI technology is highly related to the internet, and if you don't have time to focus on AI concept stocks but are optimistic about the development of the industry, you can invest directly in this AI stock ETF and directly own a basket of AI stocks.

Since the AI boom in 2023, this ETF has shown a very prominent upward trend. The net asset value of BOTZ is as high as $2.8 billion, which indicates that the fund has been widely recognized by investors. The large amount of assets provides sufficient liquidity for BOTZ, and also means that its investment portfolio is more diversified and the risk is lower. Since its inception in 2016, BOTZ has a cumulative return of 115%, with the most significant increase occurring in 2023, rising by 38%.

This ETF aims to triple the daily investment results of the Dow Jones Internet Index, and is therefore also known as a "bullish ETF".

This ETF also aims to triple the daily investment results of the Dow Jones Internet Index, but is a "bearish ETF" as it is designed to perform inversely to the index.

However, it is important to note that leveraged and inverse ETFs have higher volatility and risk, and are therefore only suitable for investors with high risk tolerance and experience. The investment returns of these ETFs may also be affected by various factors, and investors should consider multiple factors when choosing an ETF.

Overall, the advantages of investing in internet ETFs are the high growth and returns of the internet industry, as well as the diversification benefits of ETFs that can mitigate the risks of single stock investments. In addition, ETFs are flexible and convenient to trade on the exchange, allowing investors to buy or sell as needed.

There is high uncertainty and volatility in the internet industry, and the returns of ETFs may be affected by various factors such as market conditions and company performance.

Moreover, it is crucial for investors to conduct a thorough evaluation and comprehension of the fees, size, and liquidity of ETFs. Consequently, when opting to invest in internet ETFs, investors ought to gain a complete understanding of the investment strategy, tracking index, asset size, fees, liquidity, and other pertinent information, and develop a fitting investment strategy based on their risk tolerance and investment objectives.

At the same time, investors should also pay attention to diversification and avoid investing all of their funds in a single ETF or internet industry stock.