On June 4th, Hong Kong's core technology sector experienced a minor pullback. The largest and most liquid* ETF in its category, the Huabao SSE-HK Stock Connect Information Technology ETF (159131), traded in negative territory throughout the day, closing down 0.99%. However, its closing price remained above the 5-day moving average, with daily turnover exceeding 1.8 billion yuan.
Is the Hong Kong Tech Rally Over?
CICC analysis suggests that from a major cycle perspective, Hong Kong stocks have moved beyond the low-valuation recovery phase seen since last year and have formally entered the mid-to-late stage of a bull market. This stage is unlikely to be characterized by a broad-based index rally; instead, it will be a structural uptrend driven by earnings, sector momentum, and industrial realization. The contributions from liquidity and valuation re-rating have largely been priced in, and the core variable determining excess returns going forward will shift to earnings verification.
Regarding allocation, TF Securities points out that short-term opportunities in Hong Kong stocks may remain structural. They recommend continuing to focus on technology growth sectors such as internet platforms, semiconductors, hardware, and optical communications, which benefit from the expansion of AI capital expenditures, sustained attention from southbound capital, and relatively lower valuation percentiles.
Performance Overview
Over the past six months, the underlying index of the Huabao SSE-HK Stock Connect Information Technology ETF (159131), which focuses on Hong Kong's core technology, the CSI SSE-HK Stock Connect Information Technology Comprehensive Index, has gained over 25%. This performance has outpaced the Hang Seng Tech Index by 35%, the SSE-HK Stock Connect Technology Index by 34%, and the SSE-HK Stock Connect Internet Index by over 50%, demonstrating significantly sharper momentum and greater elasticity.
Statistical period: November 4, 2025, to June 4, 2026. The historical annual returns for the SSE-HK Stock Connect Information Technology C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Past performance of the index is not indicative of future results.
Product Highlights
T+0 trading is supported! The Huabao SSE-HK Stock Connect Information Technology ETF (159131) is the first of its kind in the market, the largest, and the most liquid ETF focusing on Hong Kong's core technology. Its feeder fund code is 026755. The underlying index is composed of "80% hardware + 20% software," heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software." It covers 52 Hong Kong-listed core technology companies, with its largest constituent, Lenovo Group, having a weight of 16.10%. This is currently the index with the highest Lenovo Group exposure among all indices with linked products in the market. The index components do not include large-cap internet companies like Alibaba, Tencent, or Meituan, making it sharper and more effective for capturing the AI core technology trend in Hong Kong stocks. (Data as of May 29, 2026).
Data sources: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to the Huabao SSE-HK Stock Connect Information Technology ETF being the first ETF to track the CSI SSE-HK Stock Connect Information Technology Comprehensive Index. As of May 29, 2026, the latest on-exchange size of the Huabao SSE-HK Stock Connect Information Technology ETF was 1.346 billion yuan, making it the largest among the 8 ETFs currently tracking the CSI SSE-HK Stock Connect Information Technology Comprehensive Index. Its average daily turnover year-to-date is 372 million yuan. The historical annual returns of the underlying index, the CSI SSE-HK Stock Connect Information Technology Comprehensive Index (HKD), from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Past performance of the index is not indicative of future results.
Fee Information
Subscription and redemption agents for the Huabao SSE-HK Stock Connect 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.
Risk Disclosure
The Huabao SSE-HK Stock Connect Information Technology ETF and its feeder fund passively track the CSI SSE-HK Stock Connect Information Technology Comprehensive Index. The base date for this index is November 14, 2014, and it was published 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 and do not represent the holdings or trading动向 of any fund managed by the fund manager. This product is issued and managed by Huabao Fund. Distributors are not responsible for the investment or redemption 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 choose a product suitable for their own risk tolerance. Past fund performance does not predict 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等级 as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's直销机构 and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay 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 fund product risk等级 evaluation results issued by fund distributors shall not be lower than the risk等级 evaluation results made by the fund manager. There may be differences between the fund's risk-return characteristics as described in the fund contract and its risk等级 due to different考虑因素. Investors should understand the fund's risk-return profile and谨慎选择 fund products 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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