Samsung launches China internet ETF in Hong Kong

Jun 26th, 2018 | By | Category: Equities

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Samsung Asset Management (Hong Kong) has launched the Samsung CSI China Dragon Internet ETF (2812 HK) on the Hong Kong stock exchange, providing exposure to large-cap Chinese internet companies listed on the mainland, Hong Kong and overseas.

Samsung launches China internet ETF in Hong Kong

The newly launched Samsung CSI China Dragon Internet ETF (2812 HK) provides exposure to Chinese internet giants such as Alibaba.

The fund tracks the CSI Global China Internet Index, provided by China Securities Index.

The index is currently composed of 30 of the largest Chinese internet companies listed in mainland China, Hong Kong and the US.

Stocks must have been trading for at least three months to be eligible for inclusion unless their initial public offering exceeded $10 billion.

The index adopts a free float-adjusted market capitalization-weighted methodology with a 15% cap (at re-balances) on individual constituent weightings. China’s big three internet giants – Alibaba, Baidu and Tencent – each command approximately 15% weight in the index.

The ETF tracks the index through full physical replication.

Carmen Cheung, head of ETFs at Samsung Asset Management (Hong Kong), said the fund seeks to capture the returns of next generation global internet giants.

“We strongly believe that China’s internet companies will continue to be a dominant force in the global digital economy,” she said. “With their sustainable growth and associated market capitalizations, we think the China internet sector presents an attractive opportunity for investors.”

Peter Lee, head of global ETF strategy at Samsung Asset Management (Hong Kong), added, “There’s no doubt that global institutional investors are interested in Chinese companies. Now they have a convenient way of investing in the most promising Chinese Internet companies in various markets and access to relevant IPOs all under one product.”

The ETF trades in Hong Kong dollars and offers a dividend to investors which is paid annually, usually in March. Its stated management fee is 0.65% although the fund estimates its total ongoing charges for the year at 1.8%.

While there are other similar ETFs in Hong Kong, such as the recently launched CICC KraneShares CSI China Internet Index ETF (83186 HK) which tracks the CSI Overseas China Internet Index, the Samsung fund is the first China internet ETF in the territory to include A-shares in its scope.

The new launch expands Samsung AM (HK)’s stable of Hong Kong-listed ETFs to six with approximately HK$1 billion ($128 million) in assets under management.

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