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Amundi AM debuts ETF in Hong Kong

Amundi Asset Management's first ETF launch in Asia tracks the biggest Hong Kong-listed companies and has a non-China focus.

ETF products are complimentary to the actively-managed options, especially when there is cost pressure in weak markets, noted Matthieu Guignard, global head of product development and capital markets.

The Hang Seng HK 35 Index ETF, listed on the Hong Kong Stock Exchange on Tuesday, tracks the 35 largest Hong Kong-listed companies that derive the majority of revenue overseas.

Yvonne Ng, head of ETF, indexing and smart beta sales for North Asia, believes the product provides diversification from exposure to mainland companies.

Management fee is 0.28%, while ongoing charged is estimated to be about 0.33% a year, versus the market average 0.88%, it said.

Top 10 holdings of the index, as of March:

 AIA Group  10.14%
 CK Hutchison Holdings  9.88%
 HSBC Holdings  9.39%
 Hong Kong Exchanges and Clearing  7.78%
 Sun Hung Kai Properties  4.98%
 CK Property  4.90%
 CLP Holdings    4.82% 
 Power Assets  4.00% 
 Hang Seng Bank   3.81% 
 Link REIT   3.76% 
 Total   63.46% 


The French asset manager is eager to tap the Asian ETF market and hopes to grow its passive management space to $100bn from $60bn by 2017. The firm also aims to be among the top five ETF providers in Hong Kong in the next five years, said Zhong Xiaofeng, North Asia chief executive.

In the future, Amundi hopes the Hong Kong-domiciled ETF could be traded through the Stock Connect or Mutual Recognition of Funds scheme.

Asia recorded the fastest ETF product growth globally over the past five years. However, product take up is still very small compared to the US or Europe, and the products on the Hong Kong exchange have had difficulty gathering assets.

Hong Kong’s ETF market has been active this year. BMO Global Asset Management launched its second series of four ETFs in Hong Kong two months ago, incluidng two of which are the first in Hong Kong to offer a US dollar-hedged feature.

Part of the Mark Allen Group.