HSBC Global Asset Management has announced the launch of the HSBC Hang Seng TECH UCITS ETF, the first UCITS ETF tracking the recently introduced Hang Seng TECH Index.
HSBC GAM has beaten competitors to launch Europe’s first Hang Seng TECH Index ETF.
The fund has listed on the London Stock Exchange, with further listings planned across Europe, and comes with a total expense ratio of 0.50%
Unveiled in July this year by the Hang Seng Indexes Company, the Hang Seng TECH reflects the performance of 30 of the largest and fastest-growing Greater China technology companies listed on the Stock Exchange of Hong Kong.
The index, which includes P-Chips, Red-Chips and H-Shares, has proved hugely popular with investors and already spawned a number of highly successful ETFs. Among these are the Hong Kong-listed CSOP Hang Seng TECH Index ETF (3033 HK) and iShares Hang Seng TECH ETF (3067 / 9067 HK) which have raced to US$654m and US$464m in assets under management, respectively, in the three months or so since their launch.
Prospective index constituents are taken from the information technology, industrials, healthcare, consumer discretionary or financials sectors and must have high business exposure to at least one of the following five technology themes to be eligible: Cloud, Digital, E-Commerce, FinTech or Internet.
Constituents must also pass an innovation-potential screen, with the criteria that they operate a technology-enabled business model delivered via the internet or a mobile platform, have strong research and development investment or a year-on-year revenue growth of at least 10%.
The index is weighted by free-float market capitalization with an 8% cap on individual constituent weighting. It is constituted and rebalanced quarterly. Major positions currently include Xiaomi, Alibaba, Tencent, Sunny Optical Technology, AliHealth, Meituan, JD.com, SMIC, Kingdee Software, and Netease.
It is up 79.7% over the past 12 months.
Commenting on the launch, Olga de Tapia, Global Head of ETF Sales at HSBC Global Asset Management, said: “China’s technology sector has seen explosive growth over the past few years and the region is the second biggest global hub for unicorns, which benefit from access to government incentives and the rapidly growing domestic market of middle class, tech-savvy consumers. The HSBC Hang Seng TECH UCITS ETF offers European investors a transparent and cost-efficient way to invest in this burgeoning sector and seize the unique opportunity it presents.”
Daniel Wong, Director and Head of Research & Analytics at Hang Seng Indexes Company, added: “We are delighted that a new ETF tracking the Hang Seng TECH Index is debuting in the UK and European markets. We launched the Hang Seng TECH Index to enable investors to access the innovative and increasingly important China technology sector, and we are pleased to see the launch of a Hang Seng TECH Index ETF as the first to offer this opportunity to UCITS investors.”
The fund is physically replicating and available to trade in USD (HSTE LN) and GBP (HSTC LN). Income is accumulated.