Asia ETF Roundup (Industry) – October 2020

First batch of ETFs launched under the Hong Kong-Mainland Cross-Listing Scheme.

Jackie Choy, CFA 05.11.2020
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For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) – October 2020”.

ETF Industry News

HKEx to Limit Trading Price During ETPs’ Pre-Opening Session

Effective from 19 October 2020, the Hong Kong Exchange has imposed a trading limit on the price of securities during the pre-opening session. In the 30-minute opening auction before the market opens, prices will be limited at ±15% of the previous closing. For ETPs (ETFs and leveraged and inverse products), the also applies to the first listing day of an ETP, meaning the limit is set at ±15% of the pre-IPO NAV.

The pre-opening session in the HKEx is aimed to facilitate the market to absorb the impact of overnight news and events and allow an orderly and smooth price discovery process. The enhancement is said to “improve its market microstructure for the benefit of all market participants” and “help improve price discovery and enhance liquidity”. The HKEx announcement can be found here.

ETFs Launched Under New Hong Kong-Mainland ETF Cross-listing Scheme

On 23 October, 2 pairs of ETFs were listed on Hong Kong Exchange and the Shenzhen Stock Exchange under the Hong Kong-Mainland ETF Cross-listing Scheme. These ETFs will each invest 90% or more of their net assets in their counterpart via the Renminbi Qualified Foreign Institutional Investor (RQFII) status and the Qualified Domestic Institutional Investor (QDII) status. The 4 ETFs are listed in below:

201105 HKChina ETFCross Listing(EN)

The Hong Kong-Mainland cross-listing Scheme is aimed to “facilitate access to new but established pools of liquidity and offer broader investment opportunities in both markets”.

Chinese Equity ETF Watch – Hong Kong-Domiciled Onshore Chinese Equity ETFs See Estimated Net Outflows of USD 0.7 billion

  • Hong Kong-domiciled ETFs in the China Equity Category saw estimated net outflows of USD 155 million in October. These came mainly from the Hang Seng China Enterprises Index ETF (02828), estimated at USD 288 million, which were partly offset by an estimated USD 128 million net inflow to the ICBC CSOP S&P New China Sectors ETF (03167/83167/09167).
  • Hong Kong-domiciled ETFs in the China Equity - A-Shares Category saw estimated net outflows of USD 539 million in October, coming mainly from the iShares FTSE A50 China ETF (02823/82823), which recorded net outflows estimated at USD 477 million.
  • Hong Kong-domiciled ETFs in the China Equity Category and the China Equity - A-Shares Category saw estimated year-to-date outflows of USD 0.8 billion and USD 2.6 billion, respectively.
  • In the U.S. in October, we estimate net inflows of USD 840 million from Chinese equity ETFs (ETFs in the China Region Category). The KraneShares CSI China Internet ETF (KWEB) saw net inflows estimated at USD 325 million, followed by the iShares MSCI Taiwan ETF (EWT), the SPDR? S&P China ETF (GWC) and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) each receiving net inflows of around USD 100 million.

201102 China ETFFlows Oct 20(EN)

New Launches and Listings

China: 6 ETF New Listings

  • Chinese ETF providers listed 6 new ETFs on the Shanghai Stock Exchange and Shenzhen Stock Exchange, including 4 broad market ETFs, a bond ETF and a thematic ETF.  
  • Two of the new ETFs were listed under the Hong Kong-Mainland ETF Cross-listing Scheme, tracking the Hang Seng China Enterprises Index and the S&P New China Sectors (A-Shares Capped) Index respectively.
  • These listings put the total number of ETFs listed in China at 360 (107 ETFs on the SZSE, 253 ETFs on the SSE).

Hong Kong: 4 ETF New Listings

  • Hong Kong ETF providers listed 4 new ETFs, including an ESG ETF on the Chinese A-share market and the first REIT ETF listed in Hong Kong, tracking the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index.
  • Two of the new ETFs were listed under the Hong Kong-Mainland ETF Cross-listing Scheme, tracking the CSI 300 Index and the CSI 5G Communication Index respectively.
  • These listings put the total number of ETFs listed in Hong Kong at 226 (142 ETFs and 84 multiple counters, including 26 leveraged/inverse products).

South Korea: 9 ETF New Listings

  • Korean ETF providers listed 8 thematic ETFs and a bond ETF on the Korea Exchange. The thematic ETFs provide exposure on gaming, internet and 5G industries, etc.
  • These listings put the total number of ETFs listed in South Korea at 457.

Singapore: 1 ETF New Listing

  • Phillip Capital Management listed a money market ETF on the Singapore Exchange.
  • These listings put the total number of ETFs listed in Singapore at 39 (28 ETFs and 11 multiple counters).

Taiwan: 1 ETF to be Delisted

  • Yuanta S&P GSCI Crude Oil 2x Leveraged ER Futures ETF (00672L) will be delisted from the Taiwan Stock Exchange on 13November. According to local regulations, an ETF shall be terminated if the average unit net asset value of the ETF in the last 30 business days has cumulatively fallen 90% compared to the initial unit net asset value.

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

201105 Asia New Listings Oct 20(EN)

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About Author

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

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