This afternoon (July 23rd), Hong Kong-listed hard tech stocks weakened again, with Hua Hong Grace, Naxin Micro, and Tianshu Zhixin falling over 6%. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF, the HuaBao ETF (159131), saw its on-market price decline by 0.31%, with real-time turnover reaching 2.2 billion yuan. The intraday discount/premium spread widened, and the fund attracted a further inflow of 50 million shares. Notably, this ETF has been consistently drawing capital recently, with a cumulative net inflow of 566 million yuan over the past five days.
When Will the Tech Correction End?
Huajin Securities points out that, from a current perspective, strong industry trends and policy catalysts suggest the TMT sector's adjustment may be nearing its end. Firstly, catalysts for the upward industry trend continue to emerge in the short term. These include: the ongoing global expansion of AI computing demand; the continuous emergence of new AI-related products; the upcoming release of financial results by global AI-related companies, which may show high growth rates and exceed expectations; and sustained financing for technology companies. Secondly, proactive policies are likely to continue being introduced and implemented in the near term. These include: the opening of the 2026 World Artificial Intelligence Conference; the release of the "2026-2028 National Computing Power Infrastructure Construction Action Plan"; and Shanghai's announcement of 13 measures for "AI + Manufacturing".
A Rare 'Pure' Hard Tech Play for Hong Kong
The first-of-its-kind, largest, and most liquid Hong Kong Stock Connect Information Technology ETF, the HuaBao ETF (159131), supports T+0 trading. Its offshore feeder fund code is 026755. The underlying index, the Hong Kong Stock Connect Information Technology Composite Index, is composed of "85% hardware + 15% software", heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software". It covers 60 Hong Kong hard tech companies. The combined weighting of the two wafer fabrication giants, SMIC and Hua Hong Grace, exceeds 26%. The domestic AI PC leader, Lenovo Group, has a weighting over 10%. The combined weighting of the PCB leaders, Kingboard Holdings and Kingboard Laminates, exceeds 11%. All three represent the highest concentration in any index with linked products across the entire market. Furthermore, on June 15th, the index included several new Hong Kong hard tech players such as Zhipu, Shenghong Technology, Tianshu Zhixin, and Biren Technology. The index components exclude large-cap internet firms like Alibaba, Tencent, and Meituan, giving it higher sharpness and making it more effective at capturing Hong Kong's AI hard tech market trends.
Data source: China Securities Index Co., Ltd., as of June 30, 2026. Image generated by AI.
Recent market volatility may be significant. Short-term gains or losses do not predict future performance, and fund investments may incur losses. Investors must invest rationally based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management. Individual stocks 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 or trading trends of any fund managed by the asset manager.
Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First-of-its-kind in the entire market" refers to the HuaBao Hong Kong Stock Connect Information Technology ETF being the first ETF to track the China Securities Hong Kong Stock Connect Information Technology Composite Index. As of July 21, 2026, the latest on-market size of the HuaBao Hong Kong Stock Connect Information Technology ETF was 2.062 billion yuan, the largest among the 8 ETFs tracking the same index. Its average daily turnover year-to-date is 938 million yuan, the highest among the 8 ETFs tracking the same index. The annual historical returns of the underlying index, the China Securities Hong Kong Stock Connect Information Technology Composite Index (HKD), for 2021-2025 were: -9.54%, -34.47%, -0.25%, 21.58%, 39.30% respectively. Its annual volatility for 2021-2025 was: 4.13%, 4.63%, 4.00%, 5.49%, 5.45% respectively. Past index performance does not indicate future results.
Fund Fee Information
Subscription and redemption agents for the HuaBao Hong Kong Stock Connect Information Technology ETF may charge a commission of up to 0.5%. On-market trading fees are subject to the actual charges by securities firms. No sales service fee is charged.
Reference for institutional viewpoint source: Huajin Securities report dated July 18, 2026, titled "When Will the Tech Correction End?"
Risk Disclosure
The HuaBao Hong Kong Stock Connect Information Technology ETF and its feeder fund passively track the China Securities Hong Kong Stock Connect Information Technology Composite Index. The base date for this index is November 14, 2014, and it was published on June 23, 2017. 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 or trading trends of any fund managed by the asset manager. This product is issued and managed by HuaBao Fund. Distributing institutions do not assume responsibility for the investment performance or payment obligations of the product. Investors should carefully read the "Fund Contract", "Prospectus", "Fund Product Key Facts Statement", and other legal fund documents to understand the fund's risk-return characteristics and select a product suitable for their own risk tolerance. Past fund performance does not predict its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment carries risks and requires caution! The fund manager assesses this fund's risk level as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Distributing institutions (including the fund manager's direct sales channels and other distributors) conduct risk assessments of this fund based on relevant laws and regulations. Investors should promptly pay attention to the suitability opinion issued by the distributing institution and base their decisions on the matching results. Suitability opinions from different distributing institutions may not necessarily be consistent. The fund product risk level assessment results issued by fund distributors shall not be lower than the risk level assessment result made by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk level may differ due to different considerations. Investors should understand the fund's risk-return profile and choose fund products cautiously 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 a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; investment requires caution.
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