Why I Added KWEB To My Portfolio

Last Friday, I picked up some shares of the KraneShares China Internet ETF (KWEB). It invests in a portfolio of China-based companies whose primary businesses are in the Internet and Internet-related sectors. Top holdings include Alibaba (BABA), Tencent (TCEHY), Baidu (BIDU), JD.com (JD) and Netease (NTES).

It's not a large position and I intend it to be pretty short-term in nature. I bought Friday at $40.77 and it's currently at $41.44 as I type this, a gain of about 1.6%.

This reason I bought is simple - this nonsense about delisting Chinese companies in the United States. In my opinion, this was simply a ploy by the White House to try to increase its leverage in the trade war. This notion, regardless of how serious in nature it might have been suggested, was a long shot to begin with and seems even less likely now. Even Mitch McConnell pretty much dismissed the idea altogether.

Stocks like Alibaba were hit hard following the news. BABA started the day at around $176 on Friday before falling to around $164 after the announcement. The stock has still only gained a fraction of that back and still sits at around $167.

I don't plan to hold this position for long. I already own Chinese equities in my portfolio and don't want to overweight. I'll likely be exiting at some point this week.

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