Fubon Fund Management is set to launch a new ETF in Hong Kong providing exposure to high-yielding equities of companies listed in the Greater China region.

The ETF provides exposure to high-income stocks listed in mainland China or Hong Kong.

The Fubon Hang Seng Shanghai-Shenzhen-Hong Kong (Selected Corporations) High Dividend Yield Index ETF (3190 HK) will list on the Stock Exchange of Hong Kong in Hong Kong dollars on 8 July.

The fund will be linked to the Hang Seng Shanghai-Shenzhen-Hong Kong (Selected Corporations) High Dividend Yield Index which selects its constituents from a universe of the largest 300 China-domiciled companies that are listed on the Shanghai, Shenzhen, or Hong Kong stock exchanges.

Firms that are ranked in the top quarter of the universe by one-year share price volatility, as well as those with average daily trading volumes below RMB/HKD 20 million are removed from the selection pool.

From the remaining universe, the index selects the 30 stocks with the highest one-year trailing dividend yields.

Constituents are weighted by net dividend yield to further enhance the index’s income profile while capping the weight of any single stock at 10%. Reconstitution and rebalancing occur annually with buffer rules helping to limit unnecessary turnover.

As of the end of May 2022, stocks from the financials sector dominated the index with a combined weight of 40.6%. The next-largest sector exposures were energy (21.5%), properties & construction (20.0%), and utilities (6.0%).

The ETF will come with a management fee of 0.60%.