The Hong Kong office of South Korean asset manager Mirae Asset Global Investments has launched three new ETFs on the Stock Exchange of Hong Kong targeting thematic exposures within the Chinese equity universe.
JH Rhee, Chief Executive Officer of Mirae Asset Global Investments (Hong Kong).
The funds are linked to indices from Solactive that track companies providing clean energy, developing electric vehicles, and offering consumer-oriented goods and services.
All three funds have been launched under the Global X brand, which Mirae Asset acquired in 2018, and are available in both Hong Kong dollar and US dollar trading share classes. Each comes with an expense ratio of 0.68%.
They are the Global X China Clean Energy ETF (HKD – 2809 HK; USD – 9809 HK), the Global X China Electric Vehicle ETF (HKD – 2845 HK; USD – 9845 HK), and the Global X China Consumer Brand ETF (HKD – 2806 HK; USD – 9806 HK).
The launches come six months after Mirae Asset introduced two China thematic ETFs in Hong Kong targeting companies closely related to the themes of biotechnology and cloud computing.
Methodology
The underlying indices are the Solactive China Clean Energy Index, the Solactive China Electric Vehicle Index, and the Solactive China Consumer Brand Index.
Each index selects its constituents from a universe of companies that are headquartered in China or Hong Kong and listed on the Hong Kong stock exchange, NYSE, or Nasdaq, or are listed in Mainland China and available for trading through the Stock Connect programme.
Eligible constituents must have average daily trading volume over the past six months that is equivalent to HKD 20 million or more.
Each index only chooses stocks from certain industries, defined by FactSet, which Solactive believes to be most relevant for the underlying theme. Furthermore, Solactive’s index oversight committee examines company descriptions provided by FactSet to remove firms considered insufficiently aligned with the theme.
For the clean energy and electric vehicle indices, the methodology selects the six largest firms from each industry to form the final index universe. From this final universe, the largest 20 constituents are selected and weighted by free-float market capitalization subject to a single issuer cap of 7%.
The consumer brand index is slightly different. All stocks from the 15 industries with the highest short-term weighted-average revenue growth form the final index universe. From this final universe, the largest 20 constituents are selected and weighted by free-float market capitalization subject to a single issuer cap of 7%.
All three indices are reconstituted and rebalanced on a semi-annual basis.
JH Rhee, Chief Executive Officer of Mirae Asset Global Investments (Hong Kong), said, “China is fast becoming a global innovation leader within the consumer and environmental areas with exciting stories of corporate creativity that are reshaping the consumption and energy landscape around the world. The launch of these new ETFs builds on our promise to provide unique and innovative ETF products and investment solutions and provides investors with a forward-looking investment approach that embraces the disruptive changes that are rapidly reshaping China.”
Timo Pfeiffer, Chief Markets Officer at Solactive, added, “After the release of two innovative thematic ETFs tracking Chinese Biotech and Cloud Computing companies in the summer of 2019, we are very happy to help to bring the next thematic launches of Mirae Asset to life. The latest installments give investors the opportunity to participate in China’s swiftly growing economy and its massive potential in the technological sector.”