ChinaAMC introduces Hang Seng TECH Index ETF to the Market
ChinaAMC has announced that it has launched the Hang Seng TECH Index ETF (Ticker: 3088.HK / 9088.HK), following the launch of the long-awaited Hang Seng TECH Index, which itself was introduced in response to the rapid development of technology and new economy.
Aiming to track the performance of the Hang Seng TECH Index, the ETF sets the listing price at HK$10 with an initial investment of around HKD2,000, ChinaAMC said in a press release. Its ongoing charges figure over a year is only 0.6% (including 0.40% annual management fee), lower than that of similar products in the market, the firm reports.
The solid fundamentals and enormous growth potential of technology companies, together with the emphasis on R&D and the building of economic moats have persuaded investors to favour new economy shares over old economy sector. The Hang Seng TECH Index is an index focusing on investing in new economy themes. The 30 constituent stocks include the 30 largest Hong Kong-listed companies relevant to technology themes upon screening.
According to Bloomberg data, since beginning of the year up to July 2020, the Hang Seng TECH Index has significantly outperformed the Hang Seng Index by 62%, surging nearly 51.8% as compared to the loss of 10.5% in the Hang Seng Index.
Anita Mo, Deputy Chief Executive Officer, Hang Seng Indexes Company, said: “Under the prevailing trend of technology development, new economy stocks have started to become the focus of the market. We launched our Hang Seng TECH Index with the aims to reflect the performance of sizeable companies in this sector, and to facilitate the development of various index-linked ETF and other related products. We are pleased to see the launch of the Hang Seng TECH Index ETF which will provide more investment channels in technology theme to investors.”
Frank Xiaoling Zhang, Chief Executive Officer, ChinaAMC, said: “We embrace the technology theme and have been integrating technology into our investment competencies. We listed our first pair of US-tech leveraged and inverse products back in 2016, and also launched a private fund with pioneering artificial intelligent investment strategy last year. We believe the Hang Seng TECH index would become one of the most important technology flagship indexes.”
Three major features of the Hang Seng TECH Index:
Feature 1: Gaining full access to a good portfolio of technology giants - The Hang Seng TECH Index has a diversified coverage in technology companies. In addition to the top four heavy-weight stocks namely Alibaba (9988.HK), Tencent (700.HK), Meituan Dianping (3690.HK) and Xiaomi Group (1810.HK), the index also includes a comprehensive suite of technology giants for investors to fully capture the potential return from these stocks.
Feature 2: Covering leading technology themes - Unlike traditional technology companies, the TECH Index covers companies from wider-ranging sectors such as internet (including mobile), FinTech, cloud, e-commerce, or digital activities, enabling investors to easily seize future investment appreciation opportunities from the technology industry.
Feature 3: Capturing opportunities arising from the return of Chinese concept stocks - Over recent years, many technology giants such as Alibaba, Meituan Dianping, Netease, and JD.com have returned to Hong Kong for listing. The market is expecting the return of more foreign-listed Chinese concept stocks or "unicorns" for possible simultaneous A and H share listing.
The Hang Seng TECH Index has a Fast Entry Rule to allow sizable eligible newly listed technology companies to be included in the index in a more timely manner without the need to wait until the regular quarterly review, reports ChinaAMC. Therefore, investors can quickly capture potential investment appreciation opportunities brought about by the return of Chinese concept stocks.
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