Both the Hang Seng China A Industry Top Index Fund and the Investec All China Bond Fund received a greenlight from the regulator late last month to launch their products in Hong Kong.
The Hang Seng product is a feeder fund that invests in the firm’s Hang Seng China A Industry Top Index ETF, according to the fund’s key facts statement.
The ETF, which was launched in 2013, invests in China A-shares via the firm’s renminbi qualified institutional investor (RQFII) quota, according to its fund factsheet.
Unlike most China A-share ETFs that were delisted in Hong Kong due the insufficient assets they have gathered, usually below RMB 10m ($1.57m), the Hang Seng ETF has around RMB 307.95m in assets, according to data from the Hong Kong Exchange.
A Hong Kong-based spokeswoman from Hang Seng IM said that the feeder fund was launched to reach a wider range of investors. With the fund, the bank’s relationship managers are able to offer “comprehensive wealth management services” to investors. The feeder fund is solely distributed through Hang Seng Bank, she added.
The ETF can be traded like a stock, with the price constantly changing throughout the day. But the feeder fund trades once at the end of a trading day.
“In comparison with the underlying ETF of which the trading price in the secondary market is driven by market factors such as demand and supply of the units, investors of the [feeder fund] can subscribe or redeem their units at the NAV on each dealing day,” she explained.
Both of Hang Seng’s products have different ongoing charges: the new index feeder fund has an OCF of 1.50%, while the ETF has an OCF of 1.25%, according to their key facts statements.
Investec
Investec also had its All China Bond Fund registered with the SFC.
The Ucits product is not new in Asia. It is already registered with the Monetary Authority of Singapore and was first launched in 2014, according to FE Analytics. The fund is also for sale in the UK and some European countries.
The portfolio invests primarily in bonds issued outside of the mainland, but may also invest in bonds issued onshore, according to its fund factsheet. As of the end of March, it had $53.5m in assets.
FSA sought more information from Investec, but the firm was not able to comment in time for publication.
Investec has another China-focused fund available in Hong Kong, which is the All China Equity Fund.
The three-year performance of the Hang Seng and Investec funds versus their sectors
