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This ETF seeks to mimic China’s own ‘Magnificent Seven’

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Roundhill Investments is looking to replicate the success of its Magnificent Seven ETF (MAGS) with a new ETF focused on the Chinese market. CEO Dave Mazza plans to launch the Lucky Eight ETF, which aims to be China’s equivalent to Wall Street’s big tech stocks. Mazza believes that there is potential for growth in the Chinese consumer market, and investors are seeking precise exposures like the ones found in MAGS.

The Lucky Eight ETF, which will trade under the ticker “LCKY,” will include equal-weighted exposure to eight Chinese tech giants: Tencent Holdings, Alibaba, Meituan, BYD, Xiaomi, PDD Holdings, JD.com, and Baidu. These companies were chosen for their market dominance in technological innovation, according to Roundhill’s SEC filing on May 17. Mazza sees this as an opportunity for investors to capitalize on the Chinese market, especially coming out of an economic slowdown.

While there are existing exchange-traded funds like the KraneShares CSI China Internet ETF that offer broad exposure to Chinese tech stocks, Mazza wants to provide investors with the option to focus on key names in the space. He emphasizes the importance of broad-based diversification in a portfolio but recognizes that some investors may want to concentrate on specific companies, which can be challenging with traditional Chinese ETFs. The Lucky Eight ETF aims to address this need.

The launch of the Lucky Eight ETF is contingent on SEC approval, but Roundhill Investments is aiming for a summer launch. Mazza is confident that this new ETF will provide investors with a unique opportunity to invest in Chinese tech giants and capitalize on the potential growth of the Chinese consumer market. The firm believes that the precision and focus offered by the Lucky Eight ETF will resonate with investors seeking exposure to specific companies in China’s tech sector.

It’s important to note that all investments carry risks, and investing in foreign markets like China comes with its own set of challenges. Investors should conduct thorough research and consider their risk tolerance before investing in the Lucky Eight ETF or any other investment product. Roundhill Investments encourages investors to seek advice from financial professionals and make informed decisions based on their individual financial goals and circumstances.

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