Hong Kong continues to see ETF delistings

The Mirae Asset Horizons Kospi 200 ETF will stop trading on 21 December, according to a HKEX filing.

The ETF was launched in Hong Kong in January 2011 and had a total expense ratio of 0.36%. On a three-year basis, it had a 43% return, outperforming its index, the Kopsi 200, which returned 38%, FE data shows.

Nonetheless, Mirae decided to terminate the fund after taking into account the small net asset value of the ETF, according to an official termination announcement posted on the firm’s website. The ETF had HK$39.5m ($5.06m) in assets as of 20 November.

The firm did not elaborate why it decided to terminate the fund, but said it reviews its product lineup from time to time to make sure that its products are in line with market demand.

The delisting follows the firm’s decision in October to delist two of its ETFs, which are the S&P Emerging Asia Consumer ETF and the S&P Asia ex-Japan Healthcare ETF. The consumer ETF had HK$44m in assets, while the healthcare ETF had HK$25.7m.

In Hong Kong, the firm manages five other ETFs and eight leverage and inverse products, according to the firm’s website.

The firm’s plain vanilla ETFs, the MSCI China ETF and the Hang Seng High Dividend Yield ETF continue to see healthy demand, while its L&I products have seen “satisfactory turnover” the firm noted. The MSCI China ETF had HK$797.53m in assets, while the Hang Seng ETF had $220.5m, according to their fund factsheets.

This week, CSOP Asset Management also announced the delisting of its CSOP CES China A80 ETF due inadequate assets. Other ETFs that were delisted this year include six from Samsung Asset Management and 16 managed by Deutsche Asset Management. So far, Hong Kong this year had nearly 30 ETFs delistings, which is more than the 26 ETFs that were delisted last year.

ETFs listed in Hong Kong are perceived to be unattractive to investors because they do not have the advantages of liquidity and low cost, according to King Au, CEO at Value Partners.

David Lai, partner and co-chief investment officer at Premia Partners, which launched its first ETFs last month, said that delistings are also common in the US. In Hong Kong, there can be several reasons, including cost versus benefits, firms changing business strategy or little interest from investors.

Hong Kong remains one of the largest ETF markets in the region, with 109 ETFs and 27 L&I products as of the end of October, according to data from HKEX.

Among ETFs available for sale in Hong Kong and Singapore, the SSGA SPDR Gold Shares has the largest amount of assets with $62.7bn in AUM, according to FE data.