BABA Earnings Are Hitting ETFs

After their $25 billion IPO and an epic first two months of trading Alibaba Group Holding Ltd BABA has finally come down to earth following sub-par third quarter earnings. The selling has sent the stock back to where the opening price after the IPO in September. Alibaba opened at $92.70 September 19, 2014 and hit $120 by the second week of November – a 27 percent gain in under two months. Since hitting the high, the stock has experienced a steady decline down to $100 before opening even lower after the disappointing earnings report. Highlighted below are a number of ETFs that are being affected by the stock's sell off.

Krane Shares CSI China Internet ETF

The KraneShares TrustKWEB is a fairly new ETF that launched at the end of July 2014. The ETF tracks publicly traded China-based companies whose primary businesses are in the Internet or Internet-related sectors. The portfolio is comprised of 53 holdings with the top holdings being: KWEB is about even over the last 12 months, 14 percent over the last six and down just under 2 percent on the day after Alibaba's earnings. The ETF has an expense ratio of 0.68 percent. The top three holdings in the ETF include: The ETF is up 4 percent over the last 12 months and down 1 percent over the last six months. The ETF also fell by approximately 2 percent after the earnings release. IPO has an expense ratio of 0.60 percent.

Global X NASDAQ China Technology ETF

The Global X China Technology ETF QQQC provides investors with exposure to 32 companies within the technology sector in China. The top individual holdings include: Alibaba is the seventh largest holding at 4.2 percent. QQQC is down 1 percent over the last 12 months and down 9 percent over the last six months. The ETF was holding up better than the first two ETFs highlighted, losing less than 1 percent after the earnings announcement. The ETF has an expense ratio of 0.65 percent.

Despite the Chinese Internet giant increasing revenue 40 percent to $4.22 billion, analysts were expecting $4.45 billion. Earnings came in at $0.81, which was above estimates of $0.75. Missing revenue on the first earnings report as a public company is not exactly a confidence booster; however, Alibaba remains an e-commerce giant in an area of the world where its services are in demand more than ever.

Related Link: Stifel Downgrades Alibaba On Counterfeit Issue Regulator

• Tencent Holdings Ltd at 10 percent
• Alibaba making up 9.2 percent
• JD.com Inc (ADR) JD coming in at 7.6 percent

Renaissance IPO ETF

The Renaissance IPO ETF IPO tracks stocks in the early stages of their publicly traded lives. The holdings are typically added within the first five days of trading and removed roughly two years later when it has become a seasoned stock.

• Zoetis Inc ZTS at 10 percent
• Alibaba making up 9.1 percent
• Twitter Inc TWTR at 8.2 percent

• Tencent Holdings Ltd at 9.3 percent
• NetEase, Inc (ADR) NTES making up 8.7 percent
• Lenovo Group Limited (ADR) LNVGY coming in at 8 percent