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As investors grapple with an end to US exceptionalism, KraneShares CIO Brendan Ahern shares his top Chinese stock picks — including some of the "lesser known" names — with Catalysts host Madison Mills.
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After years of underperforming, Chinese stocks are rallying to start 2025 as economic data points to some resilience. Hong Kong's Hang Seng Index massively outperforming the S&P 500 year to date. So could investors find opportunity specifically in Chinese tech stocks amid fading US exceptionalism? Joining us now, we got Brandon Hearn, CraneShares CIO. Brandon, it's great to speak with you. Listen, we've heard it loud and clear at this point. US exceptionalism is starting to unwind. You're seeing opportunities abroad and the likes of China. Where would you say is the single biggest opportunity for investors who are interested in the Chinese tech trade?
Yeah, certainly, uh, we believe that real opportunities around domestic consumption that the Chinese government has recently announced that they're really going to push the pedal to the metal when it comes to domestic consumption in China. So we really like, uh, the e-commerce companies. Uh, obviously, there's a push for, uh, technology resilience in China including AI and semiconductors. Uh, so we think that we're very well positioned at CraneShares to capture that. That, uh, you know, obviously our flagship ETF KWEB is significantly outpacing, uh, US equities year to date, but I, I really think it's important to go back to when Chinese equities bottomed in, in January of 2024 where, uh, you know, there the, the outperformance versus US equities is, is very, very significant.
And talk to me too about some of the individual names here because you sent over your top holdings and a lot of them our audience is going to recognize. You've got your Alibabas, your Pinduoduo, jd.com. But talk to me about the opportunity and some of the lesser known names that investors should be keeping an eye on.
Yeah, there's a whole host, I mean, it's very point, people know the 10 cents and Baidus and Alibabas and jd.com, but there are some really interesting companies in the online video space, companies like Kuaishou as well as Bilibili, a little bit lesser known here in the US because they really don't do a lot of, do any business here in, here in the US, but very much geared to the younger generation in China, really the gaming community. Uh, those companies are really, really pushing in online video, social media, but increasingly that incorporates AI as well.