(Yicai Global) Sept. 28 -- BlackRock, the world’s largest asset manager, plans to launch an exchange-traded fund to track China’s technology industry, despite Chinese internet and tech stocks have been declining in the third quarter.

BlackRock, which is also the world’s largest ETF issuer, has submitted a prospectus for the launch of iShares MSCI China Multisector Tech ETF, which will track the MSCI China Technology Sub-Industries ESG Screened Select Capped Index, according to information on the US Securities and Exchange Commission’s website.

The fund will focus its investments on large and mid-sized companies in China that provide technology products or related services.

Tech shares have been declining on the Hong Kong Stock Exchange this year due to a series of reasons including the worsening of the coronavirus pandemic overseas, China’s tighten supervision on internet companies, and the rumors about an increase in stamp duties on stock transactions.

Both the Hang Seng Index and the Hang Seng Tech Index have lost 11.9 percent and 27.6 percent, respectively, this year. For instance, many domestic funds have begun buying tech shares, believing that they still have long-term value.

Investment and asset management companies such as E Fund, Fullgoal, Harvest, CCB, and Penghua have issued funds that focus on the Hong Kong Stock Exchange, while fund managers Harvest and Everbright Securities Asset Management have bought their own funds by investing in the HKEX.

Industry insiders believe that BlackRock’s move aims to increase the competition with its rival KraneShares in the Chinese tech market, as the new EFT will be very much alike KraneShares CSI China Internet ETF (KWEB), which seeks to measure the performance of publicly traded China-based companies whose primary business is in the internet and internet-related sectors.

KWEB has taken in USD7.1 billion inflows in the past three years, and it has seen important growth in the past three months, despite the decline in the Chinese internet technology industry. Its investments since June 21 have reached USD4.4 billion, a sign that bottom fishers are ready to make a move.

In August, KWEB overtook BlackRock's USD6.1 billion iShares MSCI China ETF (MCHI) to become the largest China-themed ETF listed in the US.

Editor: Futura Costaglione