The firm has allowed five equity ETFs, which are listed in Hong Kong and formerly only available to trade in Hong Kong dollars, to be traded in RMB as well as US dollars, the firm said in a statement.
The additional currency counters make it more convenient for investors who want to hold the assets with US dollar or renminbi denominations, the firm said.
The Hong Kong stock exchange’s arrangement on multiple trading counters is to allow investors to choose in what currencies they want to settle their units traded for an ETF product. Investors are granted the flexibility to buy units in one counter and sell them in another by conducting transfers among currencies, according to the exchange.
An ETF that opens more than one currency counter would come with a unique ticker for each currency.
The minimum investment threshold and the ongoing charges for the new trading counters will remain the same as the existing Hong Kong dollar counter, Vanguard said.
Three-year cumulative return and tracking error of the five funds
|
Return |
Tracking error (bps) |
|
|
FTSE Asia ex Japan High Dividend Yield Index ETF |
7.51% | 4 |
| FTSE Developed Europe Index ETF | 5.05% |
2.17 |
|
FTSE Asia ex Japan Index ETF |
8.51% | 2.27 |
| FTSE Japan Index ETF | 2.61% |
2.73 |
|
S&P 500 Index ETF* |
9.64% |
2.81 |
Source:FE. Fund NAV was converted to US dollar for comparison purposes.
*Data of Vanguard S&P 500 Index ETF is from its launch date 18 May 2015.
The rise of RMB
China’s currency is increasingly being used in international transactions since its inclusion in the IMF’s special drawing rights basket of international reserve currencies in 2015.
In January, Hong Kong’s regulator relaxed the rules to allow mutual fund managers to add an renminbi share class to their registered Ucits funds.
Last month, HSBC Global Asset Management became the first asset manager to add an renminbi share class after the relaxation of rules.
The renminbi share class was added to its HSBC GIF Asia Pacific Ex Japan Equity High Dividend Fund.
Apart from the RMB-hedged class, the equity fund also offers share classes in US dollars, Hong Kong dollars, Singaporean dollars and euros for Hong Kong and Singapore investors.
This year, China also plans to pay for oil imports in its own currency instead of US dollars for the first time, according to a Reuters report. Oil has an annual trade value of $14trn, “roughly equivalent to China’s gross domestic product last year”.
