Two Chinese managers have applied to launch exchange traded funds that will track the newly launched Hang Seng Tech Index, according to records from the China Securities Regulatory Commission.
China Asset Management and Dacheng Fund Management have made applications to list the new ETFs, which will be aimed at mainland Chinese investors and will use the fund managers’ qualified domestic institutional investors quota.
Depending on the approval time, these could be the first ETFs introduced in either the mainland or Hong Kong markets tracking the Hang Seng Tech Index, which was launched on July 27.
The new index incorporates 30 constituent stocks, including heavyweight Chinese tech giants such as Tencent, Alibaba and Meituan.
Hong Kong managers have been relatively slow to roll out any fund product aimed at capturing potential growth of the index. Hang Seng Investment Management, a subsidiary of Hong Kong-listed Hang Seng bank, said in late July that it was still researching the possibility of launching a fund product based on the index.
China Fund News, a mainland Chinese publication, has reported that the launch of the Hang Seng Tech Index has been greeted with enthusiasm in China due to its strong weighting towards technology firms that are well known to Chinese investors.
China AMC and Dacheng already have other ETF products tracking Hang Seng indices, as do China Southern Asset Management, E Fund Management and Fullgoal Asset Management.
The main blue-chip Hang Seng index has been struggling to regain losses suffered since its high point of 29,056 points seen in January this year, partly due to coronavirus but also due to the political tension between the US and China.
Hong Kong’s economy contracted 9 per cent in the second quarter compared with the same period a year ago. The various political and public health crises have partly offset the excitement brought about by a slew of Chinese tech firms going public or carrying out secondary listings in Hong Kong.
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