In the latest review of the "14th Five-Year Plan" proposal approved at the 20th Central Committee's Fourth Plenary Session, key objectives emphasize "significant achievements in high-quality development and major improvements in independent innovation capabilities." The plan strongly highlights the need to "seize the historical opportunities presented by a new round of technological revolution and industrial transformation" and to "comprehensively enhance independent innovation capabilities to capture the high ground in technological development."
At the 2025 Bay Area Semiconductor Industry Ecosystem Expo held on October 15, leading Chinese hard technology companies such as Xinxin Kai, Northern Huachuang, Tuo Jing Technology, Shanghai Microelectronics, China Resources Microelectronics, and Huada Technology unveiled nearly 2,000 new products, showcasing remarkable advancements in domestic replacements within the core technology sector of chips. This raises the growth potential of domestic chips and other hard technology sectors to new heights. Huabao Fund launched the first-ever Hong Kong Stock Information Technology ETF (159131) today (October 27), tracking the CSI Hong Kong Stock Connect Information Technology Composite Index (referred to as "Hong Kong Stock Connect Information C"). This fund comprises 41 Hong Kong hard technology companies within the information technology sector, providing investors with an innovative tool to invest in "Chinese hard technology assets."
Key Index Characteristics: Selecting "Hard" Technology in Hong Kong Stocks Currently, the advanced hard technology sector, led by the chip industry, has become a key battleground among major global players. The Hong Kong Stock Information Technology ETF (159131) tracks the CSI Hong Kong Stock Connect Information Technology Composite Index (930967.CSI, referred to as "Hong Kong Stock Connect Information C"), which selects constituents from the broader CSI Hong Kong Stock Connect Composite Index within the primary industry of "Information Technology." The index includes a composition of 70% hardware and 30% software, heavily weighting sectors like semiconductors, electronics, and computer software. The weightings for consumer electronics, semiconductors, computer software, and other sub-sectors stand at 41.53%, 29.79%, 27.79%, and 0.89%, respectively. The index covers upstream processing power and downstream applications, with a pronounced focus on the hardware segment. Unlike general Hong Kong tech indices, the Hong Kong Stock Connect Information Technology Index excludes large-cap internet companies, enhancing its focus and suitability for capturing AI hard technology trends in Hong Kong stocks.
As of the end of September 2025, the Hong Kong Stock Connect Information C Index includes 41 hard technology companies, with leading domestic chipmaker SMIC accounting for 19.41%, Xiaomi Group at 10.28%, and Hua Hong Semiconductor at 5.11%. The top five weighted stocks together comprise 51%, and the top ten 72%, demonstrating a high concentration of leading firms, which aligns with the objective law of leading companies in the technology industry. The weight limit for individual constituents is set at 15%, and while fluctuations in market capitalization may cause variations, adjustments occur bi-annually to maintain balance.
Hard Technology Power: Significant Excess Returns At the recent 2025 Bay Area Semiconductor Industry Ecosystem Expo, Shenzhen Xinxin Kai showcased 16 products across two major series in process equipment and measurement equipment. Its subsidiary, Qiyunfang Technology, launched domestically developed electronic engineering EDA design software, filling a gap in high-end electronic design industrial software. Another subsidiary, Shenzhen Wanliyan, introduced the world's first ultra-fast intelligent oscilloscope operating at 90GHz, marking a significant breakthrough in high-end electronic measurement instruments in China. Additional products debuted included semiconductor silicon wafers from Hangzhou Zhongxin, heated dual-channel showerhead equipment from Anhui Boxinwei, etching silicon components from Ningxia Dunyuan Juxin, advanced packaging fully automated wafer trimming equipment from Xinfeng Precision, and Alibaba DAMO Academy's Xuan Tie series RISC-V processors along with application solutions among others. The "China Chip" industry chain is illustrating its steady progress towards domestic advancement.
The rapid expansion of the domestic hard technology industry, led by semiconductor technology in recent years, has significantly supported the market performance of the Hong Kong Stock Connect Information C Index. Between December 30, 2022, and September 30, 2025, this index has seen a cumulative increase of 110.93%, outperforming other tech indices like the Hang Seng Tech, Hong Kong Stock Connect Internet, and Hong Kong Stock Connect Technology indices, which saw increases of 57.41%, 44.91%, and 68.05%, respectively over the same period. The maximum drawdown during this time was -36.31%, also better than the -37.55%, -48.49%, and -45.48% drawdowns of the aforementioned indices.
In the first nine months of this year, the total IPO financing on the Hong Kong Stock Exchange reached HK$182.9 billion, ranking first globally, with domestic tech companies becoming the main players in Hong Kong's financing arena. Recently, international long-term funds from Europe, America, the Middle East, and emerging markets have actively participated in new stock offerings of Hong Kong tech enterprises, reflecting a strong international confidence and regard for China's technological innovation. The influx of foreign capital suggests a profound shift in global asset allocation logic. As of October 22, net investment in the southbound channel has exceeded HK$1.22 trillion this year, indicating a continuing demand from domestic investors to allocate funds to Hong Kong stocks. Moving forward, more high-quality Chinese hard technology companies are expected to list on the Hong Kong Exchange, with index investments easing the ability to enjoy the beta advantage of Hong Kong IPOs. As of October 16, 2025, the price-to-earnings ratio of the Hong Kong Stock Connect Information C Index stood at 42.68 times, well below the 51.92% percentile level over the past three years, and significantly lower than that of major global tech indices like the ChiNext and NASDAQ. In this index, hard technology companies such as SMIC have H-share valuations significantly lower than their A-shares. Through the Hong Kong Stock Information Technology ETF, investors can more easily capture the potential growth space arising from the valuation discrepancies between AH shares.
Huabao Fund: Excellence in A-share Industry ETFs In recent years, Huabao Fund has adhered to its mission of providing financial services for the real economy, focusing on leveraging high-quality, comprehensive financial services to drive high-level technological innovation and support industrial upgrades with effective financial technology, thereby enriching investor asset allocation choices with diverse fund tools. From 2021 to 2023, Huabao Fund has consecutively won the "Gold Fund - Passive Investment Fund Management Company Award" from Shanghai Securities Journal.
According to data from the Shanghai and Shenzhen Stock Exchanges, as of October 23, 2025, the asset management scale of Huabao Fund's equity ETFs reached HK$133.137 billion, leading the industry. Among the 11 A-share industry thematic ETFs with assets over HK$20 billion, Huabao Fund dominates with three, specifically the Broker ETF, Medical ETF, and Bank ETF, cumulatively accounting for HK$85.808 billion. Huabao Fund thus emerges as the fund company with the largest number of dual HK$10 billion industry thematic ETFs.
Through continuous investments and strategic arrangements centered around emerging industries in high technology, Huabao Fund has established an ETF matrix covering the AI industrial chain from processing power to large models and applications. Key products include the first-ever Hong Kong Stock Market Mainboard AI ETF focused on overseas processing power themes, the Science and Technology Innovation AI ETF covering domestic processing power themes, as well as Big Data industry ETFs, Intelligent Manufacturing ETFs, and others. The Hong Kong Stock Information Technology ETF (159131), once launched, will support "T+0" intra-day trading, adding a crucial component to Huabao's AI industrial chain ETF matrix.
Focusing on the strategic needs of long-term capital allocation, Huabao Fund's recently emphasized the construction of a "high dividend ETF family" has also gained significant scale. The fund manages various high dividend ETF products, including the Hong Kong Stock Connect Dividend ETF, 800 Dividend Low Volatility ETF, S&P Dividend ETF, and others.
In the broad-market ETF arena, Huabao Fund has successively added mainstream broad-based index ETFs such as "A50ETF Huabao" and "CSI A500ETF Huabao", becoming one of the few public fund companies to have all three "CSI A Series" broad-based ETFs. In the cyclical ETF track, Huabao Fund's chemical, non-ferrous leading, and agriculture & fishery ETFs also stand out.
Special Reminder: Recent market fluctuations may be considerable, and short-term price movements should not indicate future performance. Investors must rationally invest based on their financial conditions and risk tolerance, while paying close attention to position and risk management. Note: "First in the entire market" refers to the first ETF tracking the CSI Hong Kong Stock Connect Information Technology Composite Index, the first ETF tracking the ChiNext AI Index, and the first ETF tracking the Hang Seng China (Hong Kong listed) 30 Index. Data sources: Shanghai and Shenzhen Stock Exchanges, Hong Kong Stock Exchange, etc. Risk Disclaimer: On August 17, 2023, Huabao Fund won the "Gold Fund - Passive Investment Fund Management Company Award" at the 20th "Gold Fund" awards selection organized by Shanghai Securities Journal; similarly, it received this award in 2021 and 2022.
The Hong Kong Stock Information Technology ETF passively tracks the CSI Hong Kong Stock Connect Information Technology Composite Index, which has a base date of November 14, 2014 and was published on June 23, 2017. The index's performance over the last five full years was as follows: in 2020, 45.54%; in 2021, -9.54%; in 2022, -34.47%; in 2023, -0.25%; and in 2024, 21.58%. The component structure of the index will be adjusted according to the index's compiling rules; past performance is not indicative of future performance.
The fund manager rates the risk level of the Hong Kong Stock Information Technology ETF, Hong Kong Large Cap 30 ETF, Hong Kong Internet ETF, ChiNext Leading ETF, and ChiNext AI ETF Huabao as R4 - Medium to High Risk, suitable for aggressive investors (C4) and above. Other funds managed by Huabao Fund, including the Medical ETF, Broker ETF, Financial Technology ETF, Intelligent Manufacturing ETF, and others, have been rated R3 - Medium Risk, suitable for balanced investors (C3) and above.
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