Posted inNews

HK firm inks smart beta pact with Wisdomtree

Hong Kong-based exchange traded funds (ETF) provider Premia Partners has joined forces with US-based Wisdomtree Investments to develop smart-beta products for the Asian ETF market.
HK firm inks smart beta pact with Wisdomtree

The partnership will focus on ETF markets in Asia including Hong Kong, Singapore, Taiwan and China. Premia Partners sees an increasing demand for smart-beta products in these markets, Aleksey Mironenko, one of the partners at Premia Partners, told FSA.

He added that the partnership will, among other things, also provide Asian clients with access to Wisdomtree products.

Wisdomtree, headquartered in New York, specialises in managing exchange-traded products in US, Europe, Japan and Canada. It manages $46.8bn in assets globally.

Premia Partners, founded in Hong Kong in 2016, listed two China-focused equity ETFs on the local bourse in October 2017. The two funds together held RMB697m ($110m) in assets at the end of January 2018, according to their fact sheets.

Mironenko stressed the similarity of the visions between Premia Partners and Wisdomtree. “Between us, there is an alignment in how we think about the market, on smart-beta product and trends in particular,” he said.

He declined to share the details of products the two firms are planning to launch in the region. He noted, however, that co-branded ETFs are one option.

ETF delistings

Last year, 10 firms announced that they would delist 35 ETFs from the Hong Kong exchange. In 2016, 26 ETFs were delisted. For Mironenko, it is not a concern.

“The delisting is a good thing for the market,” he said. “It highlights that Asian investors do not buy random products. The delisted funds were those that charged very expensive fees.”

The limited selection of products and lack of scale which would bring fees down, explains why some investors would opt for trading ETFs in New York and in Europe, where products are much cheaper and better designed, he added.

However, opinions on why the ETFs were delisted are varied. In a recent interview, David Quah, who oversees quantitative investment solutions at Value Partners, argued that the increase in delisting of ETFs is due to a delay in launching the ETF Connect, and the uncertainty ETF providers face when planning their product strategy with the future cross-border scheme in mind.


Part of Mark Allen.