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Lion Global Investors and OCBC Securities have partnered to launch Singapore’s first technology-focused exchange-traded fund, launching a new ETF that tracks the recently launched Hang Seng Tech Index, which has already spawned a number of new products in Hong Kong. .
The ETF’s launch comes just weeks after the suspension of Ant Group’s highly anticipated IPO that would debut in both Hong Kong and Shanghai, as well as the introduction of tougher antitrust laws in China, which analysts suggest. curb investor interest in the strategy.
The Lion-OCBC Securities Hang Seng Tech ETF tracks the performance of the Hang Seng Tech Index, which tracks the 30 largest technology companies listed in Hong Kong, including Chinese tech groups Alibaba, Tencent and Xiaomi.
It is also the first ETF launched by OCBC Securities and only the second ETF from national fund house Lion Global Investors, after it paired with Phillip Capital in a real estate investment trust ETF in 2017. Lion Global and OCBC Securities are subsidiaries from OCBC Bank, based in Singapore.
The ETF began its initial offering period on Monday, which will continue until December 7 before officially listing on the Singapore Stock Exchange on December 10.
“The technology sector has significantly outperformed the general stock market during this period, and technology stocks have benefited from changes in consumer behavior as well as the digital transformation of companies,” said Kao Shih Teng, Senior Director and Head of Product Solutions at Lion Global.
This article was previously published by Ignites Asia, a title owned by the FT Group.
Gerard Lee, CEO of Lion Global, said geopolitical trends, such as tensions between China and the US, should also result in more Chinese tech companies being listed in Asia rather than the US, which would support further the ETF strategy.
“In addition to investing in the merits of companies at the forefront of disruption and innovation, this ETF offers investors an easy way to voice their opinion on the fundamental shifts in geopolitics,” Lee said in a release. “We are confident that this ETF will have high trading volume and liquidity.”
Lion Global estimates that investors will be able to invest in the fund for as little as 20 Singaporean dollars (US $ 14.94), excluding commissions and fees, which should make the strategy attractive to younger or even first-time investors. .
Data from the stock brokerage shows growing interest from Singaporean investors in trading the Hong Kong stock market, with trading volumes up 34% in the 12 months to October this year.
Hong Kong-listed Chinese tech companies in particular have consistently been among the top stocks traded, while ETF trading volume among retail clients has tripled from January to October this year compared to all of 2019. .
Combined assets under management for Hong Kong ETFs tracking the Hang Seng Tech index stood at HK $ 9.33 billion (US $ 1.2 billion) on Nov. 19, according to data from the Hong Kong Exchanges and Clearing website. The index was launched in July.
Turn on Asia: * Ignites Asia is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at ignitesasia.com.
