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Vanguard unveils three exchange-traded funds

Vanguard has unveiled three exchange-traded funds in Hong Kong including the country’s first ETF providing investors with exposure to European equities.

The three new Hong Kong-domiciled exchange traded funds are Vanguard FTSE Japan Index ETF, Vanguard FTSE Developed Europe Index ETF and Vanguard FTSE Asia ex Japan High Dividend Yield Index ETF.

The schemes intend to give Hong Kong investors an opportunity to diversify their portfolios across the developed markets of Europe and Japan, or to obtain exposure to higher yield stocks across the Asia region. 

Each of these ETFs will adopt an indexing approach and track the performance of their respective underlying index namely the FTSE Japan Index, the FTSE Asia Pacific ex Japan, Australia and New Zealand High Dividend Yield Index, and the FTSE Developed Europe Index.

The manager will utilise an indexing approach that involves either a replication strategy and/or a representative sampling strategy.

As the name suggests, while adopting a replication strategy, the manager will invest in all the index securities featuring in the underlying index in same weightings as that of the index.

A representative sampling strategy meanwhile, is where the manager invests in a representative sample of index securities of the underlying index by using quantitative analytical models.

The total expense ratio for the Japan Index ETF and the Developed Europe Index ETF is pegged at 0.25% of the net assets of the scheme while for the Asia ex-Japan High Dividend Yield ETF the fee is set at 0.45% of the net assets.

During the initial offer period from 3 June to 10 June, the units will be available at an initial issue price of HK$20 per unit excluding transaction fees and other charges.

These three ETFs will be listed on the main board of The Stock Exchange of Hong Kong on 13 June and the trading lot for each ETF will be minimum of 100 units. The minimum size for creation or redemption by or through participating dealers is 100,000 units.

With these fund offerings, the asset manager will now have an expanded suite of four ETFs, the maiden one–Vanguard FTSE Asia ex Japan Index ETF—being launched in 2013. This fund has a targeted total expense ratio of 0.38%.

Part of the Mark Allen Group.