Investors plug into Chinese recovery but risks remain

by | Mar 7, 2023

Investors are banking on the Chinese technology recovery speeding up as its economy opens up with e-commerce giant Alibaba (BABA) set to be one of the biggest winners, ETP provider GraniteShares says.

Its GraniteShares 3x Long Alibaba Daily ETP (3LAA) returned +87% in January as markets rushed to embrace the Chinese recovery and hopes of fading inflation boosted tech stocks globally. February was a much different story as 3LAA fell -52% as fears of inflation and higher interest rates rocked many tech stocks. The volatility in BABA comes on the heels of a tough year following COVID-19 lockdowns and regulatory action against tech firms by the Chinese Government including the suspension of the IPO by Alibaba affiliate Ant Group.

Analysts believe the opening up of the Chinese economy and the easing of regulatory action will boost the tech sector in general and consumer-focused companies specifically which will be good news for Alibaba which focuses on e-commerce, retail, internet and technology. Around 60% of Chinese e-commerce goes through Alibaba.

They point to the scale of excess saving – money that has not been spent during lockdowns – in China which is estimated at $2.6 trillion and around 15% of China’s GDP which should help drive the share price of Alibaba in the long-term.

Political risks remain as the Government could clamp down on technology firms again and there are international political risks such as potential sanctions and concerns about China’s role in the Ukraine war. Its GraniteShares 3x Short Alibaba Daily ETP offers investors the chance to short the stock.

Will Rhind, Founder and CEO of GraniteShares, said: “For many investing in Alibaba is seen as similar to investing in Amazon in 2010 before its massive growth and the returns are seen as potentially similar.

“Even in the short-term pent-up demand in China is immense and given Alibaba’s market position it could be heading for a very strong year. The recent volatility in BABA’s share price and other popular tech names has prompted an increase in trading volume in our range of short and leveraged single stock ETPs”

“Investing in an ETP like 3LAA can be seen as a way to access the potential Chinese tech recovery and the growth of the wider economy.”

GraniteShares offers a total of 129 exchange-traded products (ETPs) listed on national exchanges in the UK, France, Italy, and Germany. They consist of a suite of index ETPs tracking FAANG stocks and a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in the UK, US and European markets. They also include the world’s first leveraged single stock ETP on NIO, the electric vehicle maker and distributor.

Its FAANG, GAFAM and FATANG product suite offer long, short and 3X leveraged ETFs on FAANG, GAFAM and FATANG indices and can be traded in a single ticker symbol via ordinary brokerage accounts. FAANG consists of Facebook, Amazon, Apple, Netflix, and Google while GAFAM includes Google, Apple, Facebook Amazon, and Microsoft and FATANG covers Facebook, Amazon, Tesla, Apple, Netflix, and Google

ETPs offer a pure way to gain exposure to top tech companies in the U.S. market. Indices are equally weighted and rebalanced quarterly.

GraniteShares suite of ETPs on FAANG stocks

Product Name Ticker
GraniteShares FAANG ETP FANG
GraniteShares GAFAM ETP GFAM

Leveraged ETPs on FAANG indices 

Underlying Index +3x Long -3x Short  -1x Short

UK Leveraged Single Stock ETPs

Underlying stock +3x Long -3x Short
AstraZeneca 3LAZ 3SAZ
BAE Systems 3LBA 3SBA
Barclays 3LBC 3SBC
Diageo 3LDO 3SDO
Glencore 3LGL 3SGL
Lloyds Banking Group 3LLL 3SLL
Rio Tinto 3LRI 3SRI
Royal Dutch Shell 3LRD 3SRD
Rolls-Royce 3LRR 3SRR
Vodafone 3LVO 3SVO

US Leveraged Single Stock ETPs

Underlying stock +3x Long -3x Short
Alphabet 3LAL 3SAL
Amazon 3LZN 3SZN
Apple 3LAP 3SAP
Facebook 3LFB 3SFB
Microsoft 3LMS 3SMS
Netflix 3LNF 3SNF
Tesla 3LTS 3STS
Uber 3LUB 3SUB


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