Three i-Shares ETFs to delist

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Blackrock’s i-Shares follows a number of asset managers in pulling ETFs from the Hong Kong Stock Exchange.

The firm recently decided to delist three ETFs covering the DAX Index, the Euro Stoxx 50 and the FTSE 100.

The expected last trading day of the products will be 28 November 2019, according to a filing from Hong Kong Stock Exchange.

Like most delisted ETFs, the three funds, which were all launched in 2016, were unable to gather satisfactory assets.

As of today, the DAX Index product collected only HK$30.41m ($3.88m) over three years, according to data from the exchange.

The FTSE 100 Index ETF had HK$25m and the EURO STOXX 50 Index Fund had HK$33.94m.

An ETF needs at least $25m in assets and turnover of at least $500,000 per day in order to cover the costs of the product, according to Enhanced Investment Partners, which delisted all its ETFs from the Hong Kong Stock Exchange earlier this year.

Spate of delistings

Last month, CSOP Asset Management also filed to delist its China CSI 300 Smart ETF. The last trading day will be 22 November 2019.

Launched in 2015, the product’s AUM today is only HK$7.6m, according to the Hong Kong Stock Exchange.

In July this year, CSOP AM also cancelled the CSOP WTI Oil Annual Roll December Futures ER ETF.

In June, Harvest Global Investments in Hong Kong pulled its Harvest MSCI China A 50 Index ETF, FSA previously reported.

Since 2017, at least 10 firms announced that they were delisting around 35 ETFs – many 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.

“Diversity is really lacking in the Hong Kong ETF space,”  Mohamed M’Rabti, Brussels-based head of ETFs at settlement firm Euroclear told FSA previously, adding that assets are overly concentrated in just a few products.

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.

There are 114 ETFs in the Hong Kong universe of SFC-registered funds. Out of that total, only 60 have assets of $25m or more, according to FE data.

 

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