On May 19th, Hong Kong's hard tech sector continued its downward adjustment. Semiconductor Manufacturing International Corporation (SMIC) fell over 3%, and Huahong Semiconductor dropped more than 2%. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF, Huabao (159131), saw its intraday price decline by 1.60%, marking its fourth consecutive day of losses, with a real-time turnover of 532 million yuan.
Will the change in Federal Reserve leadership make Hong Kong tech stocks more promising? Galaxy Securities analysis points out that the market had previously traded based on expectations that the new Fed Chair, Kevin Warsh, might adopt a dovish stance, but this week's reality shattered those expectations. The market "front-ran" interest rate hikes, tightening financial conditions prematurely. Simultaneously, outgoing Chair Powell's final remarks were perceived as "hawkish," pushing market expectations for a rate cut this year to a low point. However, the market also has the potential to "front-run" expectations for monetary easing, with the latter half of the year (July-August) being a key observation window.
Regarding investment strategy, the technology industry trend has high certainty and is the core driver of this round of market movement. Following the recent short-term correction, value is emerging in some segments. Memory chips have entered a super-cycle due to explosive AI demand, with a clear upward price trend. It is advisable to focus on semiconductors/hardware equipment, memory chips, and power equipment.
Since rebounding from its low on March 31st, the underlying index of Huabao Hong Kong Stock Connect Information Technology ETF (159131) – the CSI Hong Kong Stock Connect Information Technology Composite Index – has gained a cumulative 23.2%. In the same period, the Hang Seng Tech Index and the Hong Kong Stock Connect Tech Index rose only 3.3% and 1.68% respectively, demonstrating significantly sharper performance and greater elasticity.
Statistical period: 2026.3.31 - 2026.5.18. The annual historical returns for the Hong Kong Stock Connect Information C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30% respectively. Past index performance is not indicative of future results.
Supports T+0 trading! Directly targeting the Hong Kong stock chip super-cycle – Huabao Hong Kong Stock Connect Information Technology ETF (159131) is the first of its kind in the market, the largest and most liquid in its category. Its feeder fund code is 026755. The underlying index is composed of "70% hardware + 30% software," heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software," covering 52 hard tech companies. Among them, SMIC has a weight of 14.21%, Xiaomi Group-W has 10.31%, Lenovo Group has 9.33%, and Huahong Semiconductor has 8.82%. It excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering higher sharpness and better positioning to capture the Hong Kong AI hard tech trend. (Data as of 2026.5.5)
Data source: CSI Index Company, Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to Huabao Hong Kong Stock Connect Information Technology ETF being the first ETF to track the CSI Hong Kong Stock Connect Information Technology Composite Index. As of 2026.5.11, the latest on-exchange scale of this ETF was 828 million yuan, making it the largest among the 7 ETFs currently tracking the index. Its average daily turnover year-to-date is 166 million yuan. The annual historical returns for the underlying CSI Hong Kong Stock Connect Information Technology Composite Index (HKD) from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30% respectively. Past index performance is not indicative of future results.
Fund fee explanation: Agencies handling subscriptions and redemptions for Huabao Hong Kong Information Technology ETF may charge a commission of up to 0.5%. On-exchange trading fees are subject to the actual charges by securities firms. No sales service fee is charged.
*Institutional view reference source: Galaxy Securities report "Will the Change in Federal Reserve Leadership Make Hong Kong Tech Stocks More Promising?"
Risk Disclosure: Huabao Hong Kong Stock Connect Information Technology ETF and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The base date for this index is November 14, 2014, and it was launched on June 23, 2017. The index constituents mentioned in this material are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings information or trading动向 of any fund managed by the fund manager. This product is issued and managed by Huabao Fund. Distributors do not assume responsibility for the investment, redemption, or risk management of the product. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Key Facts Statement," and other fund legal documents to understand the fund's risk-return characteristics and choose a product suitable for their own risk tolerance. Past fund performance is not indicative of future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment involves risks! The fund manager assesses this fund's risk level as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's direct sales channels and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should pay timely attention to the appropriateness opinions issued by distributors and base their decisions on the matching results. Appropriateness opinions from different distributors may not necessarily be consistent, and the risk等级评价结果 provided by fund distributors shall not be lower than the risk等级评价结果 provided by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk等级 may differ due to different considerations. Investors should understand the fund's risk-return profile and choose fund products prudently based on their own investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate its substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks; investment requires caution.
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