CICC launches fixed income ETF in Hong Kong

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Hong Kong has only a handful of SFC-registered fixed income ETF products.

CICC Hong Kong Asset Management has listed the Bloomberg Barclays China Treasury 1-10 Years ETF in Hong Kong on 12 December, according to Hong Kong Exchange filings.

CICC HK AM is the wholly-owned subsidiary of Beijing-based China International Capital Corporation.

This is the firm’s third ETF product to be listed in Hong Kong. Earlier this month, the CSI Select 100 ETF debuted. It targets China A-shares companies with high and stable ROEs, high dividend yields and high earnings growth rates, according to the firm.

Earlier this year, the firm’s first ETF, the CICC Krane Shares CSI China Internet Index ETF, was launched. It has so far accumulated $7m in assets, according to data from the exchange.

The firm also manages an actively-managed fund, the CICC RMB Fixed Income Fund, which primarily invests in renminbi-denominated onshore Chinese bonds, according to the firm’s website.

Separately, Ping An of China Asset Management also listed two China-focused factor-based products recently and is expecting to launch two more thematic ETFs.

Only a few fixed income ETFs

CICC HK AM’s latest product listing comes at a time where managers are facing intense competition in Hong Kong’s ETF market. Only 26 out of at least 110 ETFs in Hong Kong have gathered assets of $100m or more, according to data from the Hong Kong Exchange.

Furthermore, those 26 ETFs account for 96% of Hong Kong’s $41bn market.

There are only a few fixed income ETF products listed in Hong Kong. Out of the 110 listed ETFs, there are only 10 fixed income products, with six of them focusing on China bonds, according to data from the exchange.

The largest fixed income ETF is State Street Global Advisors’ ABF Pan Asia Bond Index, which has $3.69bn in assets.

That is followed by HSBC Global Asset Management’s ABF Hong Kong Bond Index Fund ($337.2m) and BMO Global Asset Management’s Asia USD Investment Grade Bond ETF ($108.8m).

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