Hang Seng Investment Management is expected to list Hong Kong’s first ETF under the new scheme that facilitates the cross-listing of ETFs between the markets in Hong Kong and the mainland.
The firm has received approval from the Securities and Futures Commission (SFC) to launch the Hang Seng Harvest CSI 300 Index ETF, according to the regulator’s records.
The ETF is a feeder fund that will invest at least 90% of its assets into the Harvest CSI 300 ETF, which was listed in Shenzhen in 2012, according to the product’s key facts statement.
According to the product’s prospectus, the ETF is expected to be listed on the Hong Kong Exchange on 23 October, but may be postponed to a date no later than 28 October.
Similar but different
While there are a number of CSI 300 ETFs already listed in Hong Kong, Rosita Lee, Hang Seng IM’s CEO, explained that the new ETF will be slightly different from what is already available in the market.
“Foreign investors are limited to the 30% cap when investing in an A-share company. This could lead to some Hong Kong-listed ETF products investing in the A-share market not being able to buy some constituent stocks. Therefore, that could result in these ETF products’ bigger tracking difference,” she told FSA.
“The Hang Seng Harvest CSI 300 Index ETF will invest in the master ETF, which does not have such limitation,” she added.
Lee also noted that the Harvest CSI 300 ETF has assets of around HK$26bn ($3.35bn), which is bigger than the combined assets of all Hong Kong-listed CSI 300 ETFs (HK$23bn).
Hang Seng IM’s new ETF is one of the two ETFs that SFC authorised in August under the Hong Kong-China ETF connectivity scheme.
The other ETF is a feeder fund that will be managed by CSOP Asset Management, which will invest in Shenzhen-listed Yinhua 5G ETF, according to a report from mainland publication Chinafundnews.
Meanwhile, in Shenzhen, two ETF feeders that invest in Hong Kong-listed products have already been approved by the China Securities Regulatory Commission, according to information from the Shenzhen Stock Exchange (SZSE). They are Harvest Fund Management’s Hang Seng China Enterprise Exchange Traded Index and Yinhua Fund Management’s ICBC CSOP S&P China New Economy Exchange Traded Index.
Both products have closed their initial offering period last month, according to SZSE.