Alibaba Stock Could Get Added to These Two ETFs

Alibaba stock is expected to hit the market sometime in September, following one of the largest IPOs ever.

Alibaba StockMany analysts expect Alibaba Group Holding Ltd. (NYSE: BABA) to raise more than $20 billion. That would surpass the $19.65 billion Visa Inc. (NYSE: V) raised in 2008 and make Alibaba the largest U.S. IPO to date.

The hype surrounding BABA stock will grow more as the Alibaba IPO date approaches and the company ramps up the "road show" portion of the process.

As that excitement grows, it won't just be retail investors clamoring for Alibaba stock. We've pinpointed two ETFs that are prime candidates to add BABA stock to their holdings in the upcoming months.

And the best part about this for investors is the two ETFs play two separate markets, all of which have sparked nice returns in 2014.

Here are two ETFs that likely will look to buy shares of Alibaba stock.

Two ETFs Eyeing Up Alibaba Stock

PowerShares Golden Dragon China Portfolio (NYSE: PGJ) has a position in more than 70 companies, and its holdings are all U.S.-listed companies that generate most of their revenue in China. For that reason, Alibaba is the perfect candidate to join PGJ's holdings once it starts trading on the New York Stock Exchange.

The three largest holdings for PGJ are Baidu, Ctrip.com International Ltd. (Nasdaq ADR: CTRP), and Qihoo 360 Technology Co. Ltd. (NYSE: QIHU).

Ctrip.com is an online travel company that helps clients book hotel accommodations and airline tickets in China, while Qihoo is a Chinese Internet and mobile security company with more than 328 million monthly active users.

PGJ currently has more than $261 million in assets. The stock has gained 9% in the last three months, and more than 23% in the last 12.

Renaissance IPO ETF (NYSE: IPO) is a play on the entire U.S. IPO market. The fact that Alibaba could be the largest U.S. IPO of all time makes it likely that Renaissance will buy Alibaba stock.

According to the fund, it holds only the largest and most liquid newly listed U.S. IPOs. Stocks are only added to the portfolio after they have traded for at least five days and are removed after two years. That five day waiting period helps negate some of the early volatility IPOs face.

IPO stock is a good choice for those investors looking to play the Alibaba IPO, and the IPO market in general. The U.S. IPO market has been busier this year than any year since the dot-com era of 2000. According to Renaissance, 181 companies have already held initial public offerings this year.

The Renaissance IPO ETF was founded in October of 2013 and has returned a gain of nearly 9% in that time. It's up more than 3% in the past few months.

While these two ETFs aim to profit from Alibaba's success, our research team found three even better ways to play this IPO - three picks with the most upside potential of all Alibaba-related plays.

And you can start profiting from these plays today, weeks before Alibaba stock hits the market.

In fact, this could be your one and only chance to make the kind of gains normally reserved for the high-net-worth investors and bankers who buy into IPOs. You can learn more about this Alibaba profit opportunity here.

Join the conversation on Twitter @moneymorning and @KyleAndersonMM using #Alibaba