KraneShares CSI China Internet ETF | KWEB UCITS| China ETF
by Kraneshares
The China Consumer E-Commerce Opportunity
An Overview of the KraneShares CSI China Internet UCITS ETF (Ticker: KWEB)
KWEB | 31/Mar/2026
Introduction to KraneShares
About KraneShares
Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. The firm is focused on providing investors with strategies to capture China's importance as an essential element of a well-designed investment portfolio. KraneShares ETFs represent innovative, first to market strategies that have been developed based on the firm and its partners' deep knowledge of investing. These strategies allow investors to stay current on global market trends and provide meaningful diversification. Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investment (UN PRI).
In 2018, KraneShares established operations in the United Kingdom (UK) and Europe to better deliver its renowned China-focused ETFs to investors in the region. In addition to launching UK/Europe-specific versions of its most popular US-listed funds, KraneShares also develops strategies tailored to meet the specific needs of its UK/European clients.
KraneShares UCITS Product Suite
Global Thematic
KOID - KraneShares Global Humanoid & Embodied Intelligence Index UCITS ETF
- Listings: LSE, MIL, XETRA
- Marketing Passports: UK, Finland, France, Germany, Ireland, Italy, Netherlands, Sweden
- Trading Currency on LSE: USD $, Sterling £
- Trading Currency on MIL: Euro €
China Thematic
KWEB - KraneShares CSI China Internet UCITS ETF
- Listing: LSE, AEX, MIL, XETRA
- Marketing Passports: UK, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Switzerland
- Trading Currency on LSE: USD $, Sterling £, Euro €
- Trading Currency on AEX: USD $
- Trading Currency on MIL & XETRA: Euro €
KSTR - KraneShares ICBCUBS SSE STAR Market 50 Index UCITS ETF
- Listing: LSE, MIL, XETRA
- Marketing Passports: UK, Finland, France, Germany, Ireland, Italy, Netherlands, Sweden, Switzerland
- Trading Currency on LSE: USD $, Sterling £
- Trading Currency on MIL & XETRA: Euro €
China Core
CHIN - KraneShares ICBCUBS S&P China 500 Index UCITS
- Listings: LSE, MIL, XETRA
- Marketing Passports: UK, Finland, France, Germany, Ireland, Italy, Netherlands, Sweden
- Trading Currency on LSE: USD $, Sterling £
- Trading Currency on MIL & XETRA: Euro €
Global Carbon
KRBN - KraneShares Global Carbon Strategy ETC Securities
- Listings: LSE, MIL, XETRA
- Marketing Passports: UK, Denmark*, Finland*, France*, Germany*, Ireland*, Italy*, Luxembourg*, Netherlands*, Portugal*, Spain*, Sweden*, Switzerland#
- Trading Currency on LSE: USD $, Sterling £
- Trading Currency on MIL & XETRA: Euro €
Sustainable Investment — SFDR Classification: Article 8
KARS - KraneShares Electric Vehicles & Future Mobility Screened UCITS ETF
- Listings: LSE, MIL, XETRA
- Marketing Passports: UK, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Sweden, Switzerland
- Trading Currency on LSE: USD $, GBP £
- Trading Currency on MIL & XETRA: Euro €
KWEB — KraneShares CSI China Internet UCITS ETF
Investment Strategy
KWEB seeks to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are within the Internet and Internet-related sectors.
KWEB Features
- Access to Chinese internet companies that provide similar services as Google, Facebook, Twitter, eBay, Amazon, etc.
- Exposure to companies benefitting from increasing domestic consumption by China's growing middle class
- Exposure to Chinese internet companies listed in both the United States and Hong Kong
China Internet Sector Highlights
- Chinese retail web sales totaled around $2.2 trillion in 2025 (compared to $1.3 trillion in the United States).
- China's internet population reached 1.13 billion people in 2024, a penetration of only 80%. The U.S. internet population reached 322 million people, a penetration rate of about 93% in 2025.
- Total Chinese retail sales reached $7.2 trillion in 2024.
- Online shopping accounted for 26% of retail purchases in China in 2025.
China Population Urbanization Rate & IMF China GDP Per Capita Current Prices
As China's population moves into cities, they gain access to better jobs and wages, which in turn has a positive impact on GDP per capita.
Chart shows Urbanization Rate (%) and GDP per Capita (USD) from 1980 to 2024, both trending upward over time.
China Household Per Capita Annual Disposable Income of Urban & Rural Household
China's urban population has almost three times more disposable income than their rural counterparts.
Chart shows per capita annual disposable income of urban households vs. per capita annual net income of rural households from 1998 to 2025 in USD, with urban income significantly higher and growing faster.
The China Internet Evolution
- China's E-Commerce market size surpassed the U.S. for the first time in 2013.
- 78% of China's population has internet access compared to 93% in the U.S.
- We believe there is potential for substantial continued growth in the Chinese internet sector.
China / US Internet Statistics
| Metric | China | US |
|---|---|---|
| Total internet population | 1.13B | 316mm |
| % of population with internet access | 80% | 93% |
| Country's share of world internet users | 20% | 6% |
| E-Commerce market size 2025 | $2.2T | $1.2T |
| Total retail sales 2025 | $7.2T | $7.5T |
| Online retail sales as % of total 2025 | 26% | 16% |
A Tale of Two Chinas
In 2013, the services sector surpassed the industrial sector as the largest contributor to China's GDP for the first time.
China GDP Breakdown (2010 - 2019)
Bar chart showing the percentage breakdown of China's GDP by Agricultural Industry, Industrial Industry, and Service Industry from 12/31/2014 to 12/31/2025. The Service Industry (blue) is the largest and growing, while Industrial Industry (red) is declining, and Agricultural Industry (dark) remains small.
Value of Monthly China Retail Sales
(9/30/2010 - 3/31/2026)
Retail sales have expanded steadily in China over the past 10 years.
Line chart showing monthly China retail sales in CNY Billions from September 2010 to March 2026, demonstrating a consistent upward trend from approximately 1,400 CNY Billions to over 4,000 CNY Billions.
China's Rapid Technology Adoption: The "Leapfrogging" Effect
China's rapid adoption of new technologies has produced a "leapfrogging" effect.
Payment
Cash → Checking → Credit → Mobile Pay
Commerce
Local Market → Big Box Retailer → E-Commerce
Transportation
Taxi → Car Ownership → App-Based Ride Sharing
Healthcare
Local Medical Care → Hospitals → E-Health
The Alibaba Ecosystem
Domestic E-Commerce
- Tmall.com (B2C Online Retail Platform)
International E-Commerce
- Lazada (Southeast Asia Ecommerce)
Logistics
- Cainiao (E-commerce Logistics Platform)
Cloud & AI
- Alibaba Cloud (Cloud Computing Services & AI Initiatives)
- Tongyi Qwen (Large Language Model)
Media
- Youku (Online video platform)
Local Services
- Ele.me (Delivery Platform)
Financial Services
- Ant Group (China Financial Technology Platform)
- 33% Ownership
The MSCI China Information Technology Index has outperformed large cap US and EM indexes.
Performance Comparison
Growth of 10,000 Units (from 12/31/2010 to 31/Mar/2026)
- MSCI China Information Technology Index
- MSCI EM Information Technology Index
- S&P 500 Index
- MSCI Emerging Markets Index
The release of DeepSeek's hyper-efficient R-1 model indicated to global markets that China's internet giants are at the forefront of global AI development.
KWEB AI Examples
- Alibaba's Qwen is one of the most popular large language models (LLMs) in China.
- Tencent Hunyuan 3D Global supports high-quality generation and processing of 3D models.
- Baidu's ERNIE Bot is also a powerful tool, which we believe benefits from Baidu's data coming from traditional search.
- Kuaishou's K-ling AI allows content creators to generate complex and visually coherent videos.
China's firms continue to innovate in AI and robotics, with key differences from their US counterparts.
| China | US | |
|---|---|---|
| Models | Prefer open-source, whole ecosystem approach | Prefer closed-loop, private models |
| Leaders | Mostly publicly-traded internet companies (KWEB names) | Mostly private companies and chipmakers |
| Robotics Supply Chain | Focus is on physical hardware, for export | Focus is on software (the brain) |
A robot-operated coffee stand in Beijing
We expect KWEB's already high share of revenue generated from AI and related services to increase as platforms connect model users to paid services.
- Alibaba, Tencent, Baidu, and Kuaishou are key providers of large language models (LLMs) globally.
- These companies mainly use LLMs, which are free, to drive use of their cloud computing services, which are paid.
- Kuaishou generates revenue from its premium AI video generation service, which is powered by its LLM.
- KWEB companies increased their total revenue attributable to cloud computing and AI services by 25% year-over-year (YoY) in the fourth quarter of 2025.
- At current levels, we estimate that the annual revenue earned from cloud computing and AI services for KWEB holdings could reach over $50 billion in 2026.
KWEB 2025 Revenue
- Cloud Computing & AI Services: 6%
The 3 & 5-year average revenue growth rates for China internet companies are like many U.S. internet companies.
Top 10 KWEB Holdings vs. their U.S. equivalents as of the latest earnings release (Q4 2025)
| Top 10 KWEB Holdings | Primary Business | KWEB Weight (%) | China 3Y Avg Revenue Growth (%) | China 5Y Avg Revenue Growth (%) | Comparable U.S. Business | US 3Y Avg Revenue Growth (%) | US 5Y Avg Revenue Growth (%) |
|---|---|---|---|---|---|---|---|
| Tencent | Social Media | 10.09 | 11 | 9 | Meta | 20 | 19 |
| Alibaba | E-Commerce | 8.93 | 5 | 15 | Amazon | 12 | 13 |
| PDD | E-Commerce | 8.78 | 53 | 51 | Amazon | 12 | 13 |
| Meituan | E-Commerce | 7.36 | 19 | 27 | Amazon | 12 | 13 |
| NetEase | Gaming | 5.91 | 5 | 9 | Activision Blizzard | 6 | 2 |
| JD.com | E-Commerce | 4.91 | 8 | 12 | Amazon | 12 | 13 |
| KE Holdings | Online Real Estate Services | 4.34 | 17 | 8 | Zillow | 10 | 20 |
| Baidu | AI Cloud & Search | 4.28 | 2 | 4 | Alphabet | 13 | 18 |
| JD Health | Online Health Services | 4.01 | 16 | 32 | Teladoc | 2 | 22 |
| Full Truck Alliance | Online Logistics Services | 3.59 | 23 | 39 | XPO | 2 | 6 |
| Average | 16 | 21 | 10 | 14 |
Despite high growth rates, China's leading internet companies currently trade at relatively low multiples.
Top 10 KWEB Holdings Valuation Metrics
| Top 10 KWEB Holdings | KWEB Weight (%) | Price to Earnings (P/E) | Forward P/E | Price to Book (P/B) | Price to Cash Flow (P/CF) |
|---|---|---|---|---|---|
| Tencent | 10.09 | 17.4 | 14.1 | 3.4 | 12.7 |
| Alibaba | 8.93 | 26.4 | 23.5 | 1.9 | 20.5 |
| PDD | 8.78 | 10.3 | 8.6 | 2.4 | 9.0 |
| Meituan | 7.36 | - | - | 2.6 | - |
| NetEase | 5.91 | 16.9 | 12.0 | 3.0 | N/A |
| JD.com | 4.91 | 14.0 | 10.0 | 1.2 | 14.2 |
| KE Holdings | 4.34 | 38.0 | 17.9 | 5.4 | - |
| Baidu | 4.28 | 16.9 | 13.3 | 1.0 | - |
| JD Health | 4.01 | 25.4 | 22.4 | 2.3 | 13.4 |
| Full Truck Alliance | 3.59 | 13.4 | 12.6 | 1.3 | - |
| Total Average | 62.20 | 19.9 | 14.9 | 2.4 | 14.0 |
KWEB's top 10 holdings are profitable, on average, and remain undervalued compared to their US counterparts.
KWEB Price vs. Top 10 Revenue & Net Income (Quarterly)
Chart showing KWEB Top 10 Revenue, KWEB Top 10 Net Income, and KWEB UCITS Price ($) from 12/31/2019 to 12/31/2025.
Price to Earnings (P/E) Ratio*
- 14.7x — CSI Overseas China Internet Index
- 28.5x — Dow Jones US Internet Composite Index
KWEB's holdings have a combined $136 billion worth of cash on their balance sheets, more than Amazon and Alphabet combined.
- KWEB: $136 Billion
- Amazon: $87 Billion
- Alphabet (Google): $31 Billion
Historically, Alibaba has outperformed Amazon in terms of revenue growth and profit margins.
YoY Revenue Growth
Bar chart comparing Alibaba and Amazon year-over-year revenue growth from 2013 to 2025.
Profit Margins
Bar chart comparing Alibaba and Amazon profit margins from 2013 to 2025.
One could purchase all the companies in KWEB with the market capitalization of either Amazon or Google and still have $750 billion+ left over
Amazon = KWEB + $841 Billion
Alphabet Google = KWEB + $2.1 Trillion
KWEB's top 10 holdings have strong buyback policies.
KWEB Top 10 Share Buyback Yield
| Company | Buyback Yield |
|---|---|
| Trip.com | 15.63% |
| Baidu | 13.43% |
| KE Holdings | 11.51% |
| JD.com | 11.30% |
| JD Health | 9.97% |
| Meituan | 8.96% |
| Tencent | 8.82% |
| Alibaba | 7.84% |
| NetEase | 5.48% |
| PDD Holdings | 0.00% |
Adding a strategic China Internet allocation to EM portfolios can increase exposure to growth sectors.
- Broad-based EM indexes often have greater weights to sectors such as financials and commodities and less exposure to growth sectors.
- Investors may consider adding a strategic China Internet allocation to their current EM portfolio to achieve the sector exposure that matches their specific growth appetite.
Portfolio Allocation Scenarios
| Allocation | % Weight of Growth Sectors |
|---|---|
| MSCI EM 100% | 59.35% |
| China Internet 25% / MSCI EM 75% | 63.80% |
| China Internet 50% / MSCI EM 50% | 72.21% |
| China Internet 75% / MSCI EM 25% | 78.64% |
Growth Sectors – Information Technology, Consumer Discretionary, Industrials, Health Care, and Communication Services
Traditional China indexes have greater exposure to State-Owned Enterprises.
- State-Owned Enterprises are defined by MSCI as companies whose largest shareholder is a government entity or whose government ownership is over 20%.
- The MSCI China Index has higher exposure to SOEs, which constitute about 17% of the Index by weight.
- KWEB has no exposure to SOEs.
MSCI China Index – SOE & Non-SOE Breakdown
(by sector: Consumer Discretionary, Communication Services, Financials, Consumer Staples, Industrials, Health Care, Information Technology, Real Estate, Materials, Energy, Utilities)
KWEB Sector Breakdown
(sectors: Consumer Discretionary, Communication Services, Consumer Staples, Real Estate, Industrials, Financials)
KraneShares CSI China Internet UCITS ETF
KraneShares CSI China Internet UCITS ETF is a sub fund of KraneShares ICAV (the "ICAV"). The ICAV is authorised as a UCITS in Ireland and regulated by the Central Bank of Ireland.
Investment Strategy
KWEB is an index-tracking, passively managed UCITS ETF that tracks the CSI Overseas China Internet Index (the Index) and invests in China based companies whose primary business or businesses are focused on internet and internet-related technology. These companies are publicly traded on either the Hong Kong Stock Exchange, NASDAQ Stock Market, or New York Stock Exchange.
Fund Details (as of 31/Mar/2026)
| Detail | Value |
|---|---|
| Listed Exchanges | LSE, AEX, ISE, Italian Borsa |
| SEDOL | BGLRQN6 |
| Total Annual Fund Operating Expense | 0.75% |
| Inception Date | 21/Nov/2018 |
| Distribution Frequency | Accumulating |
| Index Name | CSI Overseas China Internet Index |
| Net Assets | $601,376,276 |
| Number of Holdings | 33 |
| UK Reporting Fund Status | Reporting Fund |
| Investment Structure | UCITS |
| Replication Strategy | Physical |
| Base Currency | USD |
Top 10 Holdings (as of 31/Mar/2026)
| Holding | Ticker | % |
|---|---|---|
| Tencent Holdings Ltd | 700 | 10.11 |
| PDD Holdings Inc | PDD | 8.96 |
| Alibaba Group Holding Ltd | 9988 | 8.52 |
| Meituan-Class B | 3690 | 7.20 |
| NetEase Inc | 9999 | 6.06 |
| JD.com Inc-Class A | 9618 | 4.93 |
| Baidu Inc-Class A | 9888 | 4.24 |
| KE Holdings Inc-CL A | 2423 | 3.98 |
| JD Health International Inc | 6618 | 3.97 |
| Trip.com Group Ltd | 9961 | 3.59 |
KWEB Performance History (as of 31/Mar/2026)
| 3 Mo | 6 Mo | Since Inception (Cumulative) | 1 Yr | 3 Yr | 5 Yr | Since Inception (Annualized) | |
|---|---|---|---|---|---|---|---|
| Fund NAV | -18.74% | -30.15% | -16.04% | -15.19% | -0.08% | -14.89% | -2.35% |
| Index | -18.72% | -30.07% | -15.19% | -15.65% | -0.59% | -15.12% | -2.21% |
Index Definitions
The S&P 500 Index: is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The index was launched on 4/Mar/1954.
The MSCI Emerging Markets Index: captures large and mid cap representation across 23 Emerging Markets (EM) countries. With 834 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The index was launched on 1/Jan/2001.
FTSE China 50 Index: is a real-time tradable index comprising 50 of the largest and most liquid Chinese stocks (H Shares, Red Chips and P Chips) listed and trading on the Stock Exchange of Hong Kong (SEHK). The index was launched on 19/April/2001.
MSCI China Index: The MSCI China Index captures large and mid cap representation across China H shares, B shares, Red chips and P chips. With 157 constituents, the index covers about 84% of this China equity universe. The index was launched on 31/Oct/1995.
S&P China BMI Index: is a comprehensive benchmark that defines and measures the investable universe of publicly traded companies domiciled in China, but are legally available to foreign investors. The index was launched on 31/Dec/1997.
The CSI Overseas China Internet Index: selects overseas listed Chinese Internet companies as the index constituents; the index is weighted by free float market cap. The index was launched on 20/Sept/2011.
The MSCI EM Information Technology Index: is designed to capture the large and mid-cap segments across 24 Emerging Markets (EM) countries. All securities in the index are classified in the Information Technology sector according to GICS®. The index was launched on 15/Sept/1999.
The MSCI China Information Technology Index: captures large and mid cap representation across China H shares, B shares, Red chips and P chips. The index was launched on 15/Sept/1999.
Price-to-Earnings (P/E): The ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).
Forward Price-to-Earnings (P/E): A version of the P/E ratio that uses forecasted earnings for the calculation.
Important Notes
Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing.
Risk Disclosures
- The views and opinions expressed in this material are those of authors of the Krane Fund Advisors and are subject to change without notice.
- UCITS ETF units/shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units/shares on a secondary market with the assistance of an intermediary.
- UCITS shares are not individually redeemable with the issuing fund other than in large Creation Unit aggregations.
- Investing involves risk, including possible loss of principal. The Funds are subject to political, social or economic instability within China which may cause decline in value.
- Narrowly focused investments typically exhibit higher volatility. Internet companies are subject to rapid changes in technology, worldwide competition, rapid obsolescence of products and services.
- The Fund may invest in Initial Public Offerings (IPOs). Securities issued in IPOs have no trading history and prices may be highly volatile.
- KWEB is non-diversified.
- This material is for information only and does not constitute an offer or recommendation to buy or sell any investment.
Risk Disclosures Continued
- In Switzerland, the Fund has appointed as Swiss Representative Waystone Fund Services (Switzerland) SA, Av. Villamont 17, 1005 Lausanne, Switzerland. The Fund's paying agent is Helvetische Bank AG.
- Although the information provided in this document has been obtained from sources which Krane Funds Advisors, LLC believes to be reliable, it does not guarantee accuracy of such information.
- Krane Fund Advisors, LLC is appointed to act as investment manager in accordance with the requirements of the Central Bank. Krane Fund Advisors, LLC is appointed as the distributor of the ICAV.
- KIID and PRIIP documents are available in the language of any Member State where such fund is distributed and the prospectus is available only in English.
- For additional fund documentation, please visit www.waystone.com or www.kraneshares.eu.
- The Fund's indicative net asset value iNAV can be obtained during trading hours at https://www.londonstockexchange.com/stock/kweb/kraneshares-icav/company-page.
