"China Dragon" ETF landed on Wall Street as the bull market returns, benchmarking the seven giants ETF in the US stock market

Amidst the sharp rise in the Chinese stock market, on Thursday, a new ETF tracking the performance of large Chinese companies made its debut on the US stock market. This ETF is named The Roundhill China Dragons ETF (DRAG), with its current components including Tencent, Pinduoduo, Alibaba, Meituan, BYD, Xiaomi, JD.com, Baidu, and NetEase, collectively referred to as the "China Dragons" by the issuer.

DRAG aims to track an equally weighted basket of stocks composed of 5 to 10 of the largest and most innovative Chinese technology companies. Roundhill Investment Company stated that at the time of launch, these nine super large technology companies demonstrated competitive advantages in terms of economies of scale, robust fundamentals, and significantly stronger growth compared to their peers. This ETF will be rebalanced quarterly.

CEO Dave Mazza mentioned that the key difference between DRAG and other ETFs providing exposure to China, such as the $7.9 billion KraneShares CSI Overseas China Internet ETF (KWEB) and the $6.4 billion iShares China Large-Cap ETF (FXI), lies in the concentration.

DRAG has a fee rate of 0.59%, slightly lower compared to most similar ETFs.

Just this week, the four largest ETFs related to the Chinese stock market listed in the US have already attracted $2.5 billion in funds, with KraneShares' KWEB recording its largest single-day inflow in history on Tuesday. Fund managers and hedge funds are pouring into the Chinese stock market at a record pace.

Among the nearly 20 ETFs launched by Roundhill, the best-performing one is the $780 million Roundhill Magnificent Seven ETF (MAGS), which tracks the "Seven Sisters" stocks in the US and has risen by 40% this year since its launch in April 2023. Mazza considers it as the US version of DRAG