KraneShares CSI China Internet ETF (KWEB) Top 25 Holdings

The KraneShares CSI China Internet ETF (KWEB) has staged an impressive recovery in 2025, returning 49.5% year-to-date with a compound annual growth rate (CAGR) of 70.9% over the past 0.75 years. After years of policy uncertainty, regulatory tightening, and investor caution, Chinese internet and e-commerce giants are once again capturing the attention of investors. KWEB, which focuses exclusively on U.S.- and Hong Kong-listed Chinese internet companies, has become the go-to vehicle for investors betting on a sustained rebound in China’s digital economy.

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The ETF’s performance reflects renewed optimism in both consumer spending and digital infrastructure across China. Internet usage and e-commerce penetration remain among the highest in the world, while gaming, online travel, and fintech are showing signs of resurgence after prolonged headwinds. As China ramps up domestic innovation policies and eases some restrictions on private tech firms, investors see an opportunity for growth that rivals U.S. tech leaders at significantly lower valuations. For many, KWEB offers targeted exposure to the “FAANGs of China” at a fraction of the multiples of its U.S. peers.

With more than 50% of the portfolio concentrated in its top five names, KWEB is a high-conviction ETF. Alibaba, Tencent, and PDD Holdings dominate the weighting, each playing a different but complementary role in the growth story. Their collective strength, along with second-tier names such as JD.com, Baidu, Meituan, and NetEase, creates a diversified basket of Chinese tech exposure that is both consumer-driven and enterprise-driven.

1. Alibaba (9988)

Alibaba is the cornerstone of KWEB, representing 11.3% of assets and nearly 50 million shares. The company has long been synonymous with China’s e-commerce ecosystem, with its Taobao and Tmall platforms accounting for a significant share of online retail. After several years of margin pressure, regulatory fines, and leadership changes, Alibaba has steadied its operations in 2025. E-commerce revenue growth has stabilized as Chinese consumer demand rebounds, driven by post-pandemic normalization and government efforts to stimulate domestic spending.

Beyond e-commerce, Alibaba’s cloud computing unit, Alibaba Cloud, is emerging as one of its strongest growth drivers. Positioned as a key player in China’s digital infrastructure, the cloud business is benefiting from the government’s push toward AI development, data localization, and cybersecurity requirements. With Western cloud providers facing limited access to the Chinese market, Alibaba Cloud is emerging as a dominant leader in the domestic market for enterprise and AI-focused workloads. This makes Alibaba not only a consumer play but also a crucial enabler of China’s technology ambitions.

For KWEB investors, Alibaba provides both scale and value. Trading at valuations far below Amazon or Microsoft, it offers exposure to a tech giant that still dominates e-commerce and is carving out growth in cloud computing. Its diversified model, spanning retail, logistics, digital payments (Alipay), and cloud, ensures that Alibaba remains a pillar of KWEB’s portfolio. If Beijing’s regulatory approach continues to soften, Alibaba could see multiple expansions and regain its place as one of the premier growth stories in global tech.

2. Tencent (700)

Tencent accounts for 10.6% of KWEB’s weight, making it the ETF’s second-largest position. Best known for its WeChat “super-app,” Tencent touches nearly every aspect of digital life in China, from messaging and payments to gaming and advertising. With more than 1.3 billion active users on WeChat, Tencent has unrivaled reach and data advantages, which it has successfully monetized through advertising, fintech services, and an ever-expanding app ecosystem.

Gaming remains Tencent’s primary profit engine, with titles such as Honor of Kings and PUBG Mobile generating billions of dollars in revenue annually. After years of regulatory freezes on gaming approvals, the pipeline has reopened, breathing life into Tencent’s entertainment portfolio. Meanwhile, its financial services arm, WeChat Pay, has become deeply entrenched in the daily lives of Chinese consumers, making Tencent a critical player in both digital commerce and financial transactions. This diversification makes Tencent more resilient to cyclical swings in any single segment.

From an investor’s perspective, Tencent provides a unique blend of growth, stability, and cash generation. Its recurring revenues from gaming and advertising, combined with its strategic investments in global tech firms, give it a strong long-term outlook. For KWEB holders, Tencent offers exposure to both the consumer-facing and enterprise sides of China’s digital economy. The company’s ability to innovate, scale, and integrate itself into everyday life continues to make it one of the most influential and essential Chinese tech giants.

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3. PDD Holdings (PDD)

PDD Holdings, with a 7.5% weighting, represents KWEB’s high-growth disruptor. Known for its Pinduoduo e-commerce platform and rapidly expanding international subsidiary Temu, PDD has distinguished itself through its community-buying and discount-driven shopping model. This approach has proven highly attractive to price-sensitive Chinese consumers, and its aggressive overseas push has made Temu one of the fastest-growing global e-commerce platforms.

Unlike Alibaba, which is more established, PDD thrives on innovation and agility. Its ability to leverage gamified shopping, group discounts, and viral marketing has allowed it to scale quickly, capturing significant market share from more traditional rivals. Temu’s rise in North America and Europe has been particularly noteworthy, positioning PDD as one of the first Chinese e-commerce companies to export its model on a large scale successfully. This global ambition sets it apart from many of its domestic peers.

For KWEB investors, PDD serves as the growth catalyst among the fund’s top three holdings. While Alibaba and Tencent provide stability and scale, PDD represents the high-beta option with significant upside potential. Its relatively smaller weighting reflects its more volatile nature, but its rapid growth trajectory provides important diversification within the ETF. If Temu’s international expansion continues to succeed, PDD could evolve into a global e-commerce powerhouse, further boosting KWEB’s long-term performance.

Why KWEB Is a Big Name

KWEB’s top three holdings, Alibaba, Tencent, and PDD Holdings, together make up nearly 30% of the ETF’s total weight, forming the foundation of its strategy. Alibaba provides scale and diversification through e-commerce and cloud computing, Tencent anchors the portfolio with its super-app ecosystem and gaming empire, and PDD brings disruptive growth through innovative e-commerce models and international expansion. Together, they encompass a broad spectrum of China’s digital economy, ranging from domestic retail spending to global tech competition.

Beyond these three, the ETF is rounded out by other major players, including JD.com, Baidu, Meituan, NetEase, and Trip.com, which provide additional exposure to online travel, education, digital entertainment, and enterprise services. This diversification allows KWEB investors to capture both consumer-driven growth and emerging enterprise opportunities in China’s tech ecosystem. The ETF’s nearly 50% return YTD demonstrates the strong rebound across the sector, fueled by both improved regulatory clarity and renewed investor appetite for growth.

• +49.5% YTD return with 70.9% CAGR over the past 0.75 years.
• Concentrated in top holdings: Alibaba (11.3%), Tencent (10.6%), PDD Holdings (7.5%).
• KWEB captures China’s rebound in e-commerce, fintech, online travel, and gaming.
• ETF remains high-risk, high-reward, with volatility tied to China’s policy environment.
• Attractive valuations compared to U.S. tech leaders create long-term upside potential.

Why You Should Invest In Consumer Staples

KWEB has reasserted itself as one of the most dynamic ETFs of 2025, delivering strong performance at a time when global investors are searching for growth opportunities outside the United States. By focusing on China’s internet economy, it provides exposure to companies that are integral to the daily lives of billions of consumers, while also serving as key players in AI, cloud computing, gaming, and fintech. The ETF’s heavy reliance on its top three holdings makes it a high-conviction, high-risk vehicle, but also one with the potential for outsized rewards when sentiment turns positive.

For investors, the opportunity lies in valuation. Many of KWEB’s core holdings trade at steep discounts relative to U.S. counterparts despite having comparable user bases and long-term growth potential. If regulatory overhangs continue to ease and China’s economy stabilizes, the upside could be significant. The risk, however, remains tied to policy unpredictability, geopolitical tensions, and market volatility.

Still, KWEB’s recent surge highlights the appetite for Chinese tech exposure, particularly as companies like PDD prove their global ambitions and as giants like Alibaba and Tencent rebuild momentum. For long-term investors willing to tolerate volatility, KWEB provides one of the most direct, diversified, and compelling avenues to participate in the rebound of China’s digital economy.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!