The Hong Kong hard tech sector experienced a significant pullback on June 10th, following strong gains the previous day, with volatility notably increasing. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF Hua Bao (159131) saw its on-market price drop over 6% at one point. It recovered slightly in the afternoon session, closing down 5.18%. The ETF maintained a wide premium throughout the trading day, generating a turnover of 1.9 billion yuan.
Among the index's top ten holdings, only Kingboard Holdings Ltd (HKEX: 00148) managed a gain of over 1%. All other major constituents were in negative territory. Lenovo Group Ltd (HKEX: 00992) fell more than 9%, ASMPT Ltd (HKEX: 00522) dropped over 5%, while Semiconductor Manufacturing International Corp (SMIC) (HKEX: 00981), Xiaomi Corp - Class W (HKEX: 01810), Sunny Optical Technology (Group) Co Ltd (HKEX: 02382), SenseTime Group Inc - Class W (HKEX: 00020), and Ubtech Robotics Corp Ltd (HKEX: 09880) all declined more than 3%. Hua Hong Semiconductor Ltd (HKEX: 01347) was down 2%.
Sector Outlook Amid High Crowding
Analysis suggests that the technology sector may see a brief rotation from high to low within the space. AI hardware, after minor fluctuations, could continue to outperform. Several factors support this view. Firstly, the industrial trend favoring AI hardware is likely to persist in the near term. Secondly, profitability in hard tech-related industries may remain relatively strong. Thirdly, valuations and sentiment in sectors like media and pharmaceuticals are currently low. Fourthly, significant capital inflows into technology sectors such as electronics and communications have been observed since May.
Regarding the Hong Kong market, research indicates that it is currently in a balancing phase between external disturbances and internal recovery, with an overall risk-reward ratio still considered reasonable. In the short term, overseas macroeconomic risks are the dominant factor. It is advised to monitor upcoming data and events over the next two weeks closely, with a particular focus on Federal Reserve communications and the diffusion progress of AI themes in the US stock market.
Performance Over the Past Six Months
Over the recent six-month period, the underlying index for the Hong Kong Stock Connect Information Technology ETF Hua Bao (159131) – the CSI Hong Kong Stock Connect Information Technology Composite Index – has delivered a cumulative return exceeding 15%. This performance has outpaced the Hang Seng TECH Index by 30% and the Hong Kong Stock Connect Technology Index by 29% over the same period, and has outperformed the Hong Kong Stock Connect Internet Index by over 42%, demonstrating notably superior sharpness and elasticity.
Performance Period: November 10, 2025, to June 10, 2026. The historical annual returns for the Hong Kong Stock Connect Information Technology 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.
Product Features and Strategy
The ETF supports T+0 trading. It is the first of its kind in the market, the largest, and the most liquid Hong Kong Stock Connect Information Technology ETF, focusing specifically on Hong Kong hard tech. Its offshore feeder fund code is 026755. The underlying index is composed of approximately 80% hardware and 20% software companies, heavily weighted towards Hong Kong-listed "semiconductor + electronics + computer software" stocks. It encompasses 52 Hong Kong hard tech companies. The combined weight of the two major wafer foundry giants, SMIC and Hua Hong Semiconductor, exceeds 21%, the highest among all indices with linked products in the market. The domestic AI PC leader, Lenovo Group, holds an 18.20% weight, also the highest representation in any market index. The combined weight of PCB leaders Kingboard Holdings and Kingboard Laminates Holdings Ltd (HKEX: 01888) exceeds 8%, similarly the highest index representation in the market. The index components exclude large-cap internet enterprises like Alibaba, Tencent, and Meituan, resulting in higher sharpness and making it easier to capture the AI hard tech trend in Hong Kong.
Data Source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to the Hong Kong Stock Connect Information Technology ETF Hua Bao being the first ETF to track the CSI Hong Kong Stock Connect Information Technology Composite Index. As of June 9, 2026, the ETF's latest on-market scale was 1.33 billion yuan, making it the largest among the 8 ETFs currently tracking the index. Its year-to-date average daily turnover is 499 million yuan. The historical annual returns for the underlying index, the 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.
Fee Information: Subscription and redemption agents for the Hong Kong Stock Connect Information Technology ETF Hua Bao may charge a commission of up to 0.5%. On-market trading fees are subject to the rates charged by the respective securities firms. No sales service fee is charged.
Risk Warning: The Hong Kong Stock Connect Information Technology ETF Hua Bao and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The index base date is November 14, 2014, and it was launched 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 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 Hua Bao Fund Management Co., Ltd. Distributing institutions do not assume responsibility for the investment or performance of the product. Investors should carefully read the Fund Contract, Prospectus, Product Key Facts Statement, and other legal documents to understand the fund's risk-return characteristics and select products suitable for their own risk tolerance. Past performance of the fund is not indicative of its 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.销售机构 (including the fund manager's直销机构 and other销售机构) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by销售机构 and base their decisions on the matching results. Appropriateness opinions from different销售机构 may not be consistent. The fund product risk等级 evaluation results issued by销售机构 shall not be lower than the risk等级 evaluation result made 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考虑因素. Investors should understand the fund's risk-return profile and choose fund products prudently based on their own investment objectives, horizon, experience, and risk承受能力, bearing the associated 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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