CTBC Investments has launched a new ETF in Taiwan providing exposure to Hong Kong-listed stocks of mainland Chinese companies with high dividend yields.

The fund provides exposure to Hong Kong-listed stocks of mainland Chinese companies with high dividend yields.

The CTBC Hang Seng China High Dividend Yield ETF (00882 TT) has listed on Taiwan Stock Exchange.

It comes with a management fee of 0.50% and a custody fee of 0.18%.

The ETF is linked to the Hang Seng Mainland China Companies High Dividend Yield Index which selects its constituents from the universe of mainland China stocks within the Hang Seng Composite Index.

A mainland company is defined as a company deriving at least 50% of its revenue or profit from mainland China.

Small-cap and thinly traded stocks are excluded. Firms classified in the casinos, gaming, or tobacco sectors are also removed in order to satisfy the growing demand for ESG-friendly investments.

The universe is then sorted by one-year historical share price volatility with the top 25% most volatile stocks also removed from the selection pool.

The remaining constituents are then ranked by net dividend yield (dividend yield after deducting withholding tax) and the top 50 securities are selected for inclusion. Constituents are weighted by net dividend yield subject to a 10% cap on individual securities.

As of the end of February, the index offered a dividend yield of 7.01%. Stocks from the property and construction, financials, and industrials sectors each account for a weight of approximately 20% with the next-largest sector exposures being energy (10.4%), materials (7.1%), and utilities (6.6%).

Notable positions include Lenovo (4.3%), Fuyao Glass (3.8%), Agile (3.8%), Xinyi Glass (3.7%), and China Mer Port (3.1%).