Monday, 15 April 2024

BOCHK Greater Bay Area Climate Transition ETF debuts

5 min read

Bank of China (Hong Kong) Limited (BOCHK), BOCHK Asset Management Limited (BOCHKAM) and BOCI-Prudential Asset Management Limited (BOCIPAM) jointly announced the successful listing of the BOCHK Greater Bay Area Climate Transition ETF on the main board of The Stock Exchange of Hong Kong Limited (SEHK).

The HKD counter stock code of this ETF is 03129 and its RMB counter stock code is 83129. This ETF is the first exchange-traded fund in the Hong Kong market which tracks an environment, social, and governance (ESG) index with investments in the Guangdong-Hong Kong-Macao Greater Bay Area (the GBA), providing an option for investors to capture economic growth opportunities driven by climate transition in the GBA.

This ETF seeks to provide investment performance that tracks the performance of the “S&P BOCHK China Hong Kong Greater Bay Area Net Zero 2050 Climate Transition Index” (GBA Climate Transition Index), which was launched by BOCHK in collaboration with S&P Dow Jones Indices LLC in 2022.

This ETF primarily adopts a full replication strategy through investing all or substantially all of its assets in constituent securities (securities listed on SEHK and the Shenzhen Stock Exchange) of the GBA Climate Transition Index, broadly in proportion to the respective weightings of the index securities. The “BOCHK Greater Bay Area Climate Transition ETF” is the sub-fund of BOCHK’s ETF Series, with BOCIPAM as fund manager and BOCHKAM as investment adviser.

HAN Zhu, general manager of economics and strategic planning department of BOCHK and Hong Kong Financial Research Institute of Bank of China said, “Following the introduction of the GBA Climate Transition Index in July 2022, we are very honoured to collaborate with BOCHKAM and BOCIPAM and delighted to witness the successful launch of the first ETF product tracking the Index. Sustainability is the core concept underpinning the development of BOCHK. We are committed to providing our customers with diversified green and sustainable financial solutions and becoming key partners in their low-carbon transition. We will continue to leverage Hong Kong’s role as a ‘super connector’ to connect green and low-carbon projects under the national pledge of ‘carbon neutrality’ to global green and sustainable capital, supporting the transition to a low-carbon economy and society”.

Shen Hua, CEO of BOCHKAM said, “We are pleased to act as the investment adviser for the ‘BOCHK Greater Bay Area Climate Transition ETF’. ETFs offer lower investment costs, flexible trading, and high transparency compared with traditional mutual funds, providing investors with a more diversified investment alternative for asset allocation. At the same time, as the first ETF in Hong Kong market focusing on climate transition in the GBA, this ETF meets the growing investor demand for ESG investments and asset allocation needs. Over the past years, BOCHKAM has actively implemented ESG development concepts. In addition to introducing the first ESG multi-asset retail fund with RMB share class in the Hong Kong market, we have taken steps to integrate climate-related risk factors into our investment risk management framework, to enhance our relevant risk management practices. We are committed to providing more quality fund products, striving to promote the ESG investment philosophy, and contributing our efforts to strengthen Hong Kong's position as a global asset management centre”.

Dick Lee, CEO of BOCIPAM said, “BOCIPAM is delighted to successfully launch the ‘BOCHK Greater Bay Area Climate Transition ETF’ in collaboration with BOCHK and BOCHKAM. This ETF provides investors with an option to pursue structural long-term growth opportunities brought about by the transition to a low-carbon economy. Constituent stocks of the relevant index are selected from its parent index, S&P China-Hong Kong Greater Bay Area Index, taking into consideration of ESG factors, combined with three criteria exclusion policy and optimisation constraints. Looking forward, we will continue to develop different ESG products and strive to create a better future for the next generation”.

The BOCHK Greater Bay Area Climate Transition ETF is denominated in Hong Kong dollars. Currently, units of this ETF can be traded on SEHK under the Dual Counter arrangement; HKD counter and RMB counter, and will be settled in HKD and RMB, respectively. The trading board lot size of this ETF is 100 units, while the current management fee is 0.5% of the ETF’s net asset value per annum.

Re-disseminated by The Asian Banker

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