Vanguard expands ETF offering in Hong Kong

Jul 15th, 2014 | By | Category: Equities

Vanguard, the world’s third largest provider of exchange-traded funds, has expanded its presence in Hong Kong with the launch of three new locally domiciled ETFs on the Hong Kong Stock Exchange.

Vanguard expands ETF offering in Hong Kong

Shelly Painter, Vanguard Asia Regional Managing Director, and James Norris, Vanguard International Managing Director.

The new ETFs, which commenced trading on exchange last month, bring the number of Vanguard ETFs in the Hong Kong market to four.

In 2013, Vanguard introduced its first ETF in the market: the Vanguard FTSE Asia ex Japan Index ETF (2805). Since its launch, the fund has accumulated assets of about US$20 million.

The three new ETFs, each of which has the lowest expense ratio in the market for its category, break new ground for the Hong Kong market.

The Vanguard FTSE Developed Europe Index ETF (3101) is the first ETF to provide European equity exposure; the Vanguard FTSE Japan Index ETF (3126) is the first physical, market-cap-weighted ETF to provide exposure to Japan equities; while the Vanguard FTSE Asia ex Japan High Dividend Yield Index ETF (3085) is the first physical, market-cap-weighted Asia ex Japan high dividend yield index ETF.

The funds provide Hong Kong-based investors an opportunity to diversify their portfolios across the developed markets of Europe and Japan, or to obtain exposure to higher-yield stocks across the Asia region, simply and at low cost.

Shelly Painter, Vanguard Asia Regional Managing Director, said: “[The launch] marks an important step forward for Vanguard in Hong Kong with the expansion of our ETF product line-up. We are developing core building block ETFs to help long-term investors assemble globally diversified portfolios.”

She continued: “Importantly, these products give Hong Kong investors more choices and break new ground in the market by being the first physical-backed ETFs offering exposure to the developed European markets and to Japan.”

James Norris, Vanguard International Managing Director, added: “Vanguard’s approach – both with investing and in business – is to take a long-term view and understand the value of being well diversified across and within asset classes. We are committed to building our presence in Hong Kong and across the region more broadly, and the expansion of our local ETF line-up is another step along that journey.”

ETFs are one of the fastest growing product categories in the asset management industry worldwide. And this remains true for Asia too. In the last five years, assets in Asia-Pacific-listed ETFs have more than tripled, while at the same time the number of ETFs has increased more than three-fold.

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