KWEB and KraneSharesHi Travis:
In a recent piece (5/19), you discussed KWEB, the Chinese Internet ETF. Some interesting information about the company, KraneShares, the etf owner that might interest you.
A few months ago, a Chinese Investment Bank(CICC HKSE 3908) bought a controlling interest in KraneShares. Recently, it listed the KWEB shares on the Hong Kong Exchange as CICC KraneShares CSI INTERNET INDET ETF (HKSE 3186).
What is most interesting to me is that the Hong Kong shares are listed at a price of HK$80, or some 5 x cheaper than the price of the same shares listed on the NYSE (KWEB $6o+).
Any thoughts on this?
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The per-share price doesn’t necessarily mean anything even if they follow the same index. They both trade within 1% of NAV and both have essentially the same indexed holdings, with huge weightings in Alibaba, Tencent, Baidu and the rest. ETFs are priced starting at what the sponsor things is a reasonable price per share that will appeal to investors, the price per fund share at launch is not directly connected to the value of the index or the underlying stocks (or the price of similar indexed ETFs).
If the shares of 3186 perform differently than KWEB going forward, that would be odd and would likely reflect currency fluctuation timing or some unusual discount/premium anomaly.