Thursday, 30 May 2024

Hang Seng Investment launches Hang Seng S&P 500 Index ETF

5 min read

Hang Seng Investment announced the launch of the Hang Seng S&P 500 Index exchange traded fund (ETF).

The new ETF will be listed on the Hong Kong Stock Exchange on 23 April 2024, providing investors with an opportunity to track the S&P 500 Index in Hong Kong. As the only ETF of its kind in Hong Kong, it serves as a unique gateway to US equity markets.

The S&P 500 Index, the most representative US stock market index, covers approximately 82% of the market. With stringent quality screening criteria that assess market capitalisation, earnings, and liquidity, the index includes only high-quality US companies. Over the past 20 years, the S&P 500 Index has outperformed 93% of US active funds. Moreover, the index has a proven track record spanning over 60 years, boasting an average annualised return of 10.5%, making it an attractive investment for those seeking US market exposure and long-term growth potential.

Index investment vehicles, particularly ETFs tracking US stocks, have gained increasing popularity. In 2023, the ETFs tracking US stocks reached $8 trillion, accounting for nearly 70% of the global ETF market’s total assets. From 2012 to 2024, over half of the ETF fund flows in the global market flowed into ETFs tracking the US market.

Rosita Lee, director and CEO at Hang Seng Investment said: “As a key player in the Hong Kong ETF market, we are excited to introduce the Hang Seng S&P 500 Index ETF, the only ETF in Hong Kong to track S&P 500 Index. This expansion of our ETF lineup aligns with our strategy to provide diverse and global investment options, fostering new opportunities for investors and contributing to the growth of the Hong Kong ETF market.”

Dan Draper, CEO at S&P Dow Jones Indices said: “For more than six decades, the S&P 500 has been the premier market benchmark for large-cap US equities. S&P Dow Jones Indices is proud to license the S&P 500 to Hang Seng Investment for this new ETF launch, offering Hong Kong and Asia Pacific investors exposure to the US market and a transparent, objective measurement of its performance. This collaboration with Hang Seng Investment underlines the S&P 500’s growing liquid ecosystem, with over $11 trillion in assets tracking the index.”

The Hang Seng S&P 500 Index ETF will complete its initial offering on 19 April 2024. The issue price of listed class units is $1 per unit. Units will be listed for trading at a board lot size of 100 units in HKD and USD counters. The management fee for listed class units is up to 0.55% per annum, with estimated ongoing charges per year of 0.90% and an estimated annual tracking difference of -1.02%. The ETF also offers unlisted class units for wholesale distribution.

 

Re-disseminated by The Asian Banker

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