ChinaAMC launches 3 Hong Kong ETFs as demand for targeted strategies grows

China Asset Management (Hong Kong) introduced three new exchange-traded funds (ETFs) in Hong Kong on Thursday, responding to growing demand for targeted investment strategies amid market volatility. The three funds – a high-dividend ETF, a growth ETF, and a Hong Kong-US "Halo" ETF – will commence trading on September 30, with listings on the Hong Kong stock exchange in multiple currencies.

Tian Gan, CEO of ChinaAMC (HK), explained that the move reflects the expanding scope of Hong Kong's ETF market, catering to investors seeking specialized products to complement their portfolios.

The high-dividend ETF targets 50 Hong Kong-listed companies based on factors like consistent dividends, profitability, and volatility, offering monthly distributions with an annual yield of around 7%. The growth ETF focuses on 50 companies with strong earnings growth, profitability, and cash generation across various sectors. Meanwhile, the Halo ETF, touted as Asia's first ETF centered around the Halo theme, invests in 60 Hong Kong- and US-listed companies with substantial physical assets and low obsolescence risk, primarily in resources, infrastructure, and technology.

The launch coincides with Chinese regulators' efforts to encourage mainland institutional investors to allocate more resources to Hong Kong-listed assets, potentially bolstering demand for the city's burgeoning ETF market. Last month, the National Financial Regulatory Administration (NFRA) announced support for mainland insurance funds investing in ETFs through schemes like Stock Connect, enabling cross-border trading between mainland and Hong Kong markets.

ChinaAMC (HK) stated that the three funds are designed with potential participation from mainland investors in mind and could become eligible for ETF Connect within six months, contingent on meeting specific requirements. Despite this, the products were not specifically tailored for mainland insurers. Gan noted that recent regulatory changes have made the environment for cross-border investment increasingly favorable, anticipating that more mainland institutional and individual investors will engage with the Hong Kong market through compliant channels and cross-border schemes over the next five years.