Harvest Global delists China-focused ETF

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Separately, a number of players in Hong Kong’s ETF market have begun offering differentiated products.

Harvest Global Investments in Hong Kong, the wholly-owned subsidiary of China-headquartered Harvest Fund Management, has delisted its Harvest MSCI China A 50 Index ETF, according to filings from the Hong Kong Exchange (HKEX). The last trading of the product is on 28 June.

Like most delisted ETFs, the fund was not able to gather satisfactory assets. Launched in 2013, the fund’s AUM today is RMB 7.4m ($1.07m), according to data from the HKEX.

FSA sought more information from Harvest Global, but the firm was not able to provide additional information in time for publication.

The firm has another similar proeduct, the MSCI China A Index ETF, which has fared better, reporting RMB 80m in assets.

The difference between the two products is that the MSCI China A Index captures large and mid-cap representation across China equities listed on the Shanghai and Shenzhen exchanges and has around 387 constituents, while the MSCI China A 50 Index only captures only the 50 largest constituents of the MSCI China A Index, according to their factsheets.

In 2017, CSOP Asset Management made a similar move, delisting its CES China A80 ETF while maintaining its other product, the FTSE China A50 ETF, which had accumulated more assets.

At the time, the firm determined that its A80 ETF was not able to attract substantial assets because its performance is not differentiated from the A50 ETF.

Besides Hong Kong, Harvest Global has launched ETFs and active products in the US and Europe, according to the firm’s website. Globally, the firm manages around $121bn in assets.

Moving toward diversification?

Many ETFs in Hong Kong have been delisted in the past two years. Since 2017, at least 10 firms announced that they were delisting around 35 ETFs – most were focused on China A-shares.

The lack of diversification is one of the reasons why. Out of the 110 listed ETFs in the territory, nearly half of them are focused on the Hong Kong and onshore China equity markets.

However, players have begun to differentiate new products by launching smart beta and thematic ETFs, including Premia Partners and Ping An of China Asset Management.

The Securities and Futures Commission in March also relaxed rules on inverse products to further diversify its leveraged and inverse (L&I) market. Under the new rules, the leverage factor cap of inverse products was raised to two-times (-2x) from the maximum leverage factor of one time (-1x).

CSOP Asset Management was the first to take advantage of the new rules, recently launching the CSOP Hang Seng Index Daily (-2x) Inverse Product.

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