BlackRock launches MSCI Emerging Markets ETF in Hong Kong

Jul 29th, 2020 | By | Category: Equities

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BlackRock has launched a new ETF in Hong Kong that provides exposure to the MSCI Emerging Markets Index.

BlackRock launches MSCI Emerging Markets ETF in Hong Kong

BlackRock has launched Hong Kong’s first global emerging markets ETF.

The iShares MSCI Emerging Markets ETF has listed on the Stock Exchange of Hong Kong in US dollar (9022 HK) and Hong Kong dollar (3022 HK) share classes.

It comes with an expense ratio of just 0.18% and has been seeded with HKD100 million (approx. $15m)

Interestingly, the fund is not only the first ETF in Hong Kong to track the MSCI Emerging Markets Index but it is also the territory’s first global emerging markets ETF, with other EM funds linked to either regional (ASEAN) or single-country (China or Taiwan) indices.

The MSCI Emerging Markets Index, arguably the de-facto reference for emerging market equity performance, comprises large- and mid-cap stocks representing approximately 85% of the free-float market capitalization of 26 different developing country exposures.

China accounts for the bulk of the index weight at 41.0% followed by Taiwan (12.3%), South Korea (11.6%), India (8.0%), and Brazil (5.1%).

MSCI recently added a new batch of Chinese A-shares to the index in November 2019. The index now includes over 470 large- and mid-cap China A-shares at a 20% partial inclusion factor. The inclusion of Chinese A-shares as well as growth in China’s stock market has seen the country’s weight expand from roughly 28% in 2017.

As for sector exposures, the index is currently tilted towards financials (19.1%), consumer discretionary (17.4%), information technology (16.9%), and communication services (13.5%), followed by materials (6.9%) and consumer staples (6.5%).

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