Mirae Asset’s Global X has launched three new ETFs on the Stock Exchange of Hong Kong.
Two of the funds provide actively managed exposure to companies aligned with the investment themes of the metaverse and electric vehicles & batteries – they are the Global X Metaverse Theme Active ETF (3006 HK) and Global X Electric Vehicle and Battery Active ETF (3139 HK).
The third listing, the Global X Hang Seng ESG ETF (3029 HK), delivers socially responsible exposure to Hong Kong’s main stock market barometer – the Hang Seng Index.
Jung Ho Rhee, Chief Executive Officer of Mirae Asset Global Investments (Hong Kong), said: “We see the metaverse and green mobility to be key themes transforming the global economy. Providing investors access to these evolving, high-growth themes in an active ETF format will enable them to benefit from Mirae Asset’s strong research capability while positioning for long-term growth in a cost-efficient way.
“We are also delighted to launch the Global X Hang Seng ESG ETF, offering investors another product to meet the growing demand for ESG-linked products. This is a testament to Mirae Asset’s continued commitment to providing investment solutions that promote sustainable development in the communities we invest in. Building on our track record of ESG products, we will continue to broaden options for investors to align their investments with their values.”
Metaverse
The Global X Metaverse Theme Active ETF invests in firms globally that provide products, services, or technologies that enable the development and operation of the metaverse.
The metaverse is a term used to describe the concept of a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe.
The metaverse is expected to be richly integrated into the physical world, thereby creating a new medium and economy for work, leisure, and innovation, while transforming long-standing industries and markets such as finance, banking, retail, education, health, and fitness, among many others.
Securities will be selected from four metaverse-related industry segments which are each capped at 40%.
The four segments are ‘Technologies’, companies developing and providing technologies that enable augmented & virtual reality, blockchain, and digital payments; ‘Platforms’, companies developing games, concerts, and educational experiences held virtually in the metaverse; ‘Devices’, companies developing and providing wearable devices and sensory equipment used to interact in the metaverse; and ‘Processing’, companies providing the computing power needed to support the metaverse.
Mirae Asset examines a firm’s revenue and profit exposure, research and development expenditures, and business plans when determining whether a company is aligned with the above industry segments.
The ETF comes with ongoing charges of 0.75% per annum.
The fund is the second ETF in Hong Kong to target the metaverse investment theme following the February 2022 launch of the CSOP Metaverse Concept ETF (3034 HK). This fund is also actively managed and comes with a management fee of 0.99%.
Electric vehicles
The Global X Electric Vehicle and Battery Active ETF also harnesses Mirae Asset’s research capabilities to select firms globally that are aligned with three related industry segments.
The three industry segments are ‘Electric Vehicles and Batteries’, companies developing and producing electric vehicles and the batteries used to power them; ‘Components’, companies developing and producing key components such as semiconductors, electric motors, power inverters, onboard battery chargers, and battery management systems; and ‘Critical Materials’, companies mining and providing materials such as lithium, nickel, and cobalt.
The ETF also comes with ongoing charges of 0.75% per annum.
Hang Seng ESG
The Global X Hang Seng ESG ETF is linked to the HSI ESG Enhanced Select Index which screens out stocks from the Hang Seng Index universe based on various norms and values-based criteria before reweighting the remaining constituents so as to enhance the overall ESG profile.
The Hang Seng Index represents the largest and most liquid Greater China companies trading on the Stock Exchange of Hong Kong. Primary and secondary share listings, as well as real estate investment trusts (REITs), are all eligible for inclusion.
The Hang Seng promotes diversification by targeting at least 50% market capitalization coverage across seven major industry groups, while also ensuring that at least 20 Hong Kong domiciled constituents, a move aimed at preserving the representation of local firms in an index that has become increasingly dominated by Mainland-domiciled companies.
The HSI ESG Enhanced Select Index, meanwhile, begins its construction process by removing from the Hang Seng all known violators of UN Global Compact principles as well as companies with business operations linked to controversial weapons, tobacco, or thermal coal.
Firms with ESG risk ratings that rank in the top 10% of the Hang Seng universe based on ESG risk ratings from ESG analytics firm Sustainalytics are also removed from the selection pool.
The remaining constituents are initially weighted by float-adjusted market capitalization and then adjusted to increase the weight of stocks with lower ESG risk ratings and decrease the weight of stocks with higher ESG risk ratings.
The index is reconstituted and rebalanced on a quarterly basis.
The ETF comes with ongoing charges of 0.29%. This is slightly higher than the HSI ESG Enhanced Select Index ETF (3136 HK), the only other Hong Kong-listed ETF to track the same index, which costs 0.20%.