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Asia ETF Roundup (Industry) – February 2020

Hong Kong to waive stamp duty on stock transfer by market makers ETF creation/redemption

Jackie Choy, CFA 05/03/20

For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) – February 2020”.

ETF Industry News

Hong Kong Waives Stamp Duty on Stock Transfers by ETF Market Makers

On 26 February, the Hong Kong government announced a proposal to waive the stamp duty on stock transfers paid by ETF market makers in the course of creating and redeeming ETF units listed in Hong Kong. We would be supportive of this measure as reduced frictional costs could result in narrower bid/ask spreads, benefiting end investors.

Chinese Equity ETF Watch – HK-Domiciled Chinese Equity ETFs See Estimated USD 0.2 billion Net Inflows from Offshore Markets and USD 1.0 billion Net Outflows from Onshore Markets

  • Hong Kong-domiciled ETFs in the China Equity Category saw estimated net inflows of USD 0.2 billion in February, coming mainly from the iShares Core MSCI China Index ETF (02801). Meanwhile, ETFs in the China Equity – A-Shares Category saw estimated outflows of USD 1.0 billion, coming mainly from the ChinaAMC CSI 300 Index ETF (03188/83188) and the CSOP FTSE China A50 ETF (02822/82822).
  • For the first two months of 2020, Hong Kong-domiciled ETFs in the China Equity Category saw estimated outflows of USD 0.2 billion, while ETFs in the China Equity – A-Shares Category saw estimated outflows of USD 1.1 billion.
  • In the U.S. in February, we saw an estimated USD 0.2 billion of net inflows from the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) and an estimated USD 0.7 billion of net outflows from the Xtrackers Harvest CSI 300 China A ETF (ASHR).

New Launches and Listings

Hong Kong: ComStage Delisted 2 ETFs

  • Two ComStage ETFs, namely the ComStage 1 DAX® UCITS ETF (03171) and ComStage 1 DivDAX® UCITS ETF (03177) had their last trading day on the Hong Kong Exchange on 14 February. Low total net asset value of these funds was cited as main factors in determining the termination of these funds in Hong Kong.
  • Excluding these ETFs, the total number of ETF listings in Hong Kong stands at 201 (128 ETFs, 73 multiple counters, including 24 L&I Products).

Taiwan: Yuanta Listed a Bond ETF

  • On 14 February, Yuanta Securities Investment Trust listed a fixed income ETF on the Taipei Exchange. The ETF tracks the Bloomberg Barclays China Policy Bank 5+ Year Bond Index.
  • This listing put the total number of ETFs listed in Taiwan at 223, of which 104 of them are bond ETFs.

China: 13 ETF New Listings

  • Chinese ETF providers listed 13 ETFs on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, including 2 broad market ETFs, 3 sector ETFs, 7 thematic ETFs and 1 strategic beta ETF. 
  • These listings put the total number of ETFs listed in China at 290 (83 ETFs on the SZSE, 207 ETFs on the SSE). 

ETFs Launched in February 2020 in the Asia ex-Japan Region  

About Author Jackie Choy, CFA

Jackie Choy, CFA  

Jackie Choy, CFA is the Director of ETF Research for Morningstar Investment Management Asia