In the 1986 hit movie Ferris Bueller's Day Off, Matthew Broderick famously says, “Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." The same could be said for China’s capital markets, as things can evolve quickly, especially when global investors are not paying attention.

Since September 2024, we have seen a significant increase in trading volumes and IPOs in Hong Kong and Mainland China. However, these changes have largely flown under the radar for US and global investors. As US equities have outperformed non-US equities since the Global Financial Crisis (GFC),¹ global investors have become laser-focused on US equities. A major factor in this outperformance has been US equities' overweight to technology stocks and other growth factors, compared to a relative underweight to these factors in many non-US markets, and especially in Emerging Markets.

This sector composition disparity between markets was especially stark for China. In 2015, financials, energy, and industrials accounted for over 50% of the MSCI China Index. Meanwhile, the S&P 500 Index already had a significant weight to information technology.

Today, the MSCI China Index contains significantly more information technology stocks, reflecting the evolution of China's economy over the last decade. As MSCI China is heavily weighted to offshore China, which we define as Hong Kong and U.S.-listed stocks, this transformation did not hit the Mainland market until recently.

In recent years, we have seen a rapid rise in the valuations of onshore-listed semiconductor makers, semiconductor equipment makers, and technology hardware providers, such as electrical equipment suppliers and communications equipment makers. At the same time, Mainland China's markets have been peppered with new listings of high-tech firms. Then, starting in 2022, local investors began to recognize China’s government’s emphasis on raising technology self-reliance in response to US export controls on companies such as Huawei and bid up technology shares.

For our China A shares ETF the KraneShares MSCI China A 50 Connect Index ETF (Ticker: KBA), this has meant a significant shift in its sector composition from financials being the top sector to information technology now being the top sector within the portfolio.

Notably, today, four of KBA's top ten holdings were listed after the fund launched in March of 2014.

Conclusion

We believe China's underperformance relative to US equities over the past decade has been driven by the market's historical underweight to technology stocks and growth factors. While the offshore market evolved faster, adding more technology stocks earlier on, the Mainland took longer to make this shift. In recent years, thanks to the strong performance of technology hardware stocks and new listings, the Mainland stock market has become more technology-oriented. This is reflected in the evolution of the holdings of our China A shares ETF the KraneShares MSCI China A 50 Connect Index ETF (Ticker: KBA), which now counts information technology as its top sector by weight.

Below is a quick synopsis of KBA's top ten holdings, many of which feature prominently in China's technology ecosystem.

KBA Top Ten Holdings Overview (As of 6/2/2026)

Contemporary Amperex Technology Co. (CATL)

• KBA Weight: 9.32%
• Founded: December, 2011
• Headquarters: Ningde City, Fujian Province
• Market Cap: RMB 1.97 Billion

CATL is the world's leading provider of power battery systems, specializing in R&D, production, and sales of new energy vehicle power battery systems and energy storage systems. The company has core technology advantages in battery materials, battery systems, and battery recovery, forming a comprehensive production service system. CATL operates an international first-class R&D team with provincial key laboratories and testing centers. The company has undertaken numerous national-level projects including the "12th Five-Year Plan" New Energy Vehicle Industry Technology Innovation Project and is one of the first 10 power battery enterprises included in MIIT's "Standard Conditions for the Automotive Power Battery Industry." Main products include battery packs, cells, modules, and energy storage systems, with battery power systems accounting for 74.7% of revenue.

Zhongji Innolight Co., Ltd.

• ​KBA Weight: 6.74%
• Founded:​ June, 2005
• Headquarters:​ Longkou City, Yantai, Shandong Province
• ​Market Cap:​ RMB 1.33 trillion

Zhongji Innolight is a leading manufacturer of high-end optical communication transceiver modules, specializing in communication equipment manufacturing and optical communication equipment. The company focuses on developing and producing high-speed optical modules for cloud data centers and wireless networks. Its main products represent various Ethernet transceiver modules. The company serves global cloud computing and telecommunications infrastructure markets, and high-end optical communication transceiver modules account for the majority of its revenue. Zhongji Innolight has established itself as a key supplier in the AI infrastructure boom, providing critical optical communication solutions for data centers.

Zijin Mining Group Co., Ltd.

• ​​KBA Weight: 6.25%
• Founded:​ September, 2000
• Headquarters:​ Shanghang County, Longyan City, Fujian Province
• Market Cap:​ RMB 804.22 billion

Zijin Mining is a large multinational mining group engaged in global exploration, development, engineering design, and technical research of metal mineral resources including copper, gold, zinc, lithium, silver, and molybdenum. The company is dual-listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange. Zijin Mining has important mining investment projects in 17 Chinese provinces and 17 countries worldwide, including major copper and gold mines in Serbia, Congo, Colombia, and Tibet. The company has accelerated entry into new energy and new materials industries with lithium projects in Argentina, Tibet, and Hunan. Zijin Mining possesses leading technical advantages in geological exploration, mining technology, comprehensive resource utilization, and environmental protection. The company has established a "five rings and one" mining engineering management model and won the "China Charity Award" four consecutive times. Main products include gold bullion, copper concentrate, zinc products, and lithium resources.

Kweichow Moutai Co., Ltd.

• ​KBA Weight: 4.74%
• Founded:​ November 1999
• Headquarters:​ Moutai Town, Renhuai City, Guizhou Province
• Market Cap:​ RMB 1.60 trillion

Kweichow Moutai is China's premier liquor producer, established in 1999 and listed on the Shanghai Stock Exchange in 2001. The company specializes in production and sales of Maotai and series wines, with its core product Kweichow Moutai wine being the originator and typical representative of China's large-scale sauce-flavored liquor. The brand integrates national geographical indication products, China-EU geographical indication products, organic food, and national intangible cultural heritage. Kweichow Moutai's marketing network covers 64 countries and regions across domestic and international markets. The company adheres to the mission of "brewing high-quality life" and is committed to building a world-class enterprise with outstanding products, brands, and innovation. Moutai wine accounts for 85% of revenue.

Foxconn Industrial Internet Co.

• ​KBA Weight: 4.31%
• Founded:​ March, 2015
• Headquarters:​ Shenzhen, Guangdong Province
• Market Cap:​ RMB 1.49 trillion

Foxconn Industrial Internet (FII) is a leading professional design and manufacturing service provider of communication network equipment, cloud service equipment, precision tools, and industrial robots globally. The company provides intelligent manufacturing services centered on industrial internet platforms, offering comprehensive solutions based on automation, networking, platformization, and big data. FII is committed to transforming traditional manufacturing into smart manufacturing, building a new ecosystem of "addressed manufacturing + industrial internet" for cloud computing, mobile terminals, IoT, AI, and robotics. Main products include servers, data center equipment, network switches, cloud service equipment, industrial robots, and high-precision structural components for smartphones. The company serves global well-known customers with 3C electronics accounting for 99.82% of revenue.

Cambricon Technologies

• ​KBA Weight: 4.16%
• Founded:​ March 2016
• Headquarters:​ Beijing (Haidian District)
• Market Cap:​ RMB 874.27 billion

Cambricon Technologies focuses on R&D of artificial intelligence chip products and technological innovation, committed to building core processor chips in the AI field. The company's core personnel have over a decade of experience in processor chips and AI, leading development of intelligent processor instruction sets and micro-architectures. Cambricon has developed a comprehensive product line covering cloud, edge, and terminal scenarios, including the Cambricon Neuware software development platform, MLU series chips and various processors. The company's terminal intelligent processor has been shipped in over 100 million devices, while cloud-based smart chips and accelerator cards have achieved mass production delivery with mainstream domestic server manufacturers. Cloud products account for a majority of revenue.

Eoptolink Technology Inc., Ltd.

• ​KBA Weight: 3.78%
• Founded:​ July 2005
• Headquarters:​ Suzhou City, Jiangsu Province
• Market Cap:​ RMB 348.72 billion

Eoptolink Technology specializes in optical communication components and modules. The company focuses on developing and manufacturing optical transceiver interface components, optical fiber adapters, and ceramic casings for telecommunications and data communication applications. Located in Suzhou's high-tech zone, the company serves the growing demand for high-speed optical interconnects in cloud data centers, 5G networks, and telecommunications infrastructure. The company has established itself as a key supplier in the optical communication industry chain, providing critical components for high-speed data transmission applications.

Hygon Information Technology Co., Ltd.

• ​​KBA Weight: 3.35%
• Founded:​ 2014
• Headquarters:​ Tianjin
• Market Cap:​ RMB 730.68 billion

Hygon Information Technology specializes in R&D, design, and sales of high-end processors for servers and workstations. The company's main products include Haiguang general-purpose processors (CPU) and Haiguang co-processors (DCU). Its products are widely used in the telecommunication, finance, internet, education, and transportation industries. The company follows a "selling one generation, verifying one generation, developing one generation" strategy, with high-end processors accounting for a majority of revenue.

CMOC Group - 3.31%

• ​KBA Weight: 3.31%
• Founded:​ 1969
• Headquarters:​ Henan
• Market Cap:​ RMB 411 billion

CMOC Group is a major global mining and commodity trading company. It is one of the world's largest producers of molybdenum, tungsten, niobium, and cobalt, as well as a leading copper producer. CMOC has operations in Brazil, Ecuador, and the Democratic Republic of the Congo. The original company was founded as a wholly state-owned enterprise in 1969 under Luoyang Luanchuan Molybdenum, with the Sandaozhuang mine being established the next year. By the early 2000s, Luoyang Luanchuan was researching ways to extract Scheelite from its main molybdenum mine. Together with Ximen Tungsten Co Ltd, it founded a joint venture, Luoyang Yulu Mining Co. Ltd. to process the ore.

BYD

• ​KBA Weight: 3.02%
• Founded:​ February 1995
• ​Headquarters:​ Shenzhen, Guangdong Province
• Market Cap:​ RMB 810.75 billion

BYD is a leading manufacturer of new energy vehicles and electronics, established in 1995. The company specializes in automobiles, rechargeable batteries, and electronic products. BYD has become one of the world's largest new energy vehicle manufacturers, producing electric vehicles, plug-in hybrids, and traditional automobiles. The company also manufactures chargers, audio products, optoelectronic products, lithium batteries, energy storage products, nickel batteries, mobile phone components, and solar cells. BYD's business spans automotive (80.68% of revenue), mobile phone components and assembly (19.31%), and other segments. The company is vertically integrated, producing many components in-house including batteries, semiconductors, and electronic controls, giving it significant cost advantages and supply chain control.

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For KBA top ten holdings, risks, and standard performance, please click here.

Top 10 Holdings as of 3/31/2026 Holdings are subject to change.	Ticker	%
CONTEMPORARY AMPEREX TECHN-A	300750	8.49
ZIJIN MINING GROUP CO LTD-A	601899	6.12
KWEICHOW MOUTAI CO LTD-A	600519	5.21
ZHONGJI INNOLIGHT CO LTD-A	300308	4.60
FOXCONN INDUSTRIAL INTERNE-A	601138	4.57
BYD CO LTD -A	002594	4.26
HYGON INFORMATION TECHNOLO-A	688041	3.55
EOPTOLINK TECHNOLOGY INC L-A	300502	3.20
CHINA MERCHANTS BANK-A	600036	3.10
CAMBRICON TECHNOLOGIES-A	688256	2.99