Just a few days after CSOP Asset Management launched Hong Kong’s first ETF tracking the Hang Seng Technology Index, two more firms have followed suit to roll out products tracking the same index.
China Asset Management received approval from the Securities and Futures Commission (SFC) to launch the China AMC Hang Seng Tech Index ETF, while Hang Seng Investment Management also received a greenlight to roll out the Hang Seng Tech Index ETF, according to records from the regulator. Both products were approved yesterday.
The Hang Seng Tech Index, which was launched in late-July, includes 30 of the largest technology companies listed in Hong Kong. The index universe covers companies that have high business exposure to selected technology themes, including internet, fintech, cloud and e-commerce, according to a statement from the index provider.
Hang Seng IM will begin its initial public offering from 1 to 2 September and expects the product to be listed on the exchange on 4 September, according to Rosita Lee, the firm’s CEO.
FSA sought more information from China Asset Management, but it was not able to provide more details about the product.
Price competition
Given that there are now at least three ETFs tracking the Hang Seng Technology Index, one of the factors that investors will take into consideration is price, Hang Seng IM’s Lee said.
Lee believes that the firm has an advantage over others given its low management fees compared to other products in the market, she said.
Hang Seng IM’s Hang Seng Tech Index ETF will have a management fee of 0.55% per annum and a total expense ratio (TER) of 0.87%, Lee said, but did not give figures for the product’s ongoing charges (OCF)
Meanwhile, CSOP Asset Management’s Hang Seng Tech ETF’s management fee is 0.99%, while its OCF is 1.49%, according to its product key statement.
So far, there are no details yet available online for China AMC’s ETF.
Another factor will be tracking error, according to Lee, adding that the tracking error of the firm’s new ETF is -0.94%.
Separately, other firms have also recently launched technology-themed products in Hong Kong. For example, earlier this month, Mirae Asset Global Investments listed two China thematic ETFs that invest in the robotics and AI and semiconductor themes. Nikko Asset Management also launched the Nikko AM E-Games Active ETF in June this year and the Global Internet ETF in October.
In total, around 17 technology-related ETFs have been launched in Hong Kong, according to the latest data from HKEX.
